Indo Rama shelves retail plans

Huge investment required in the supply chain acted as a deterrent.

At a time when Indian corporates are falling over each other to grab a share of the Rs 20,000 crore organised retail opportunity, the Lohia family of Indo Rama has shelved its plans to invest in the sector. Ravi Deol, the former managing director of Barista who was spearheading the foray, has left.

"Deol is no longer working for us. Our retailing plans are on hold right now, but we will look at any opportunity that comes up in the future," said OP Lohia, chairman, Indo Rama.

The Lohias had set up Indo Rama Retail Holdings some months ago to establish a chain of retail stores in the country. They had roped in Deol, who had quit Barista in 2003, to explore opportunities in the sector. Deol said he continued to be a consultant to Indo Rama. He denied speculation that he had signed up with a leading telecom services company.

Indo Rama sources said the team put together for the grocery venture had been disbanded.

The sources said the Lohias saw good margins in the grocery business but the huge investment required in the supply chain and the need to build sustainable scale on a national basis were acting as deterrents. Had the venture taken off, it would have been the Lohia family's first diversification from the commodities business.

Indo Rama Synthetics is a leading player in the synthetic fibre industry. In the last three years, anticipating a step up in demand, Indo Rama invested heavily in expanding the capacity of its polyester plant near Nagpur.