PSU trading firms told to diversify

With plans to disinvest public sector trading companies MMTC and State Trading Corporation (STC) virtually on the back burner, the commerce ministry has asked both to rework their business models and venture into new areas of activity such as warehousing and retailing.

"There are no plans to disinvest the government's stake in these companies. But, merely focussing on channeling activities will not be sustainable. They will have to focus on new activities to sustain their profitability," an official in the commerce department told Business Standard.

MMTC has already asked IL&FS to work out a blueprint for the setting up of warehouses in the free trade zones envisaged in the Foreign Trade Policy to stock ferrous and non-ferrous metals.

It has identified five potential locations around the country for the purpose, including Noida in north India, Cochin or Chennai in the South, Kandla or Mumbai in the West and Haldia in the East.

In addition, MMTC has also been asked by the ministry to consider setting up warehouses in countries like the US and in focus areas like Africa, Latin America and CIS countries to stock goods of small Indian exporters.

Similarly, the State Trading Corporation has been asked to work on a proposal to set up a national retail training centre that will provide training to entrepreneurs keen to enter the retail sector in the country.

"Retail boom is the next big wave. Though STC has no experience in retailing, we have asked them to explore if they can set up a national level retail training centre," officials said.