Slick move: IBP enters tourism, to set up resorts

It has signed alliances with some state governments to promote tourism in the respective states and set up resorts.

The company has signed memorandums of understanding (MoUs) with the tourism development boards of Kerala and Andhra Pradesh.

Similar MoUs are expected to be signed shortly with tourism boards of West Bengal, Orissa, Punjab, Haryana, Karnataka and Rajasthan.

The MoUs permit IBP to set up resorts and restaurants at the tourist destinations on land provided by the state government.

Needless to say, the resorts will house IBP retail outlets. The destinations would attract more tourists by offering lodging. IBP would gain from assured sales through such arrangements.

In addition to this, IBP would set up flagship retail outlets at select locations across the country conforming to international standards, incorporating shopping marts, food stations, bank and public call office. The company plans to set up six flagship retail outlets this year of nearly 2,000 square metre each.

IBP general manager (eastern region) Ashoke Datta said, "The MoUs provide win-win situation for the state governments and the company. There are hundreds of destinations in our country which do not have proper accommodation facilities. And there are thousands of outlets which can have dining and washing facilities."

He said alliances with state tourism development boards and new flagship outlets would help IBP achieve its target of setting up 800 new outlets. An investment of Rs 450""500 crore would be needed for the plan.

Estimates suggests investment at tourists destinations would cost nearly Rs 10 crore in the quarter ending December. The figure would jump if more state governments agreed to the alliance.

"There will be no shortage of funds," Datta said. Pay-back period would be around five-and-a-half years, on the basis of a 14 per cent cumulative return a year.

IBP has arrangements with Valvoline, HLL and Amul for kiosks at its retail outlets. A similar tie-up with ITC was under discussion.

Last year, the company commissioned 523 outlets, accounting to 45 per cent of the total industry commissioning. At the end of August, the company's retail network consists of 2,196 outlets and 38 dealers. The company today launched a campaign.

Christened "We care" the promotion exercise ensures a customer will be greeted at every outlet with "Namaste".

Then the customer will be offered a glass of cold water. There will be stands at the outlets to tell customers how they should ensure that they would be buying quality oil.