IKEA has delivered on its promise of investing over Rs 10,500 crore in India, says deputy CEO & CFO of IKEA. In an exclusive conversation, Juvencio Maeztu tells CNBC-TV18's Shereen Bhan that they will reveal the next investment number soon and it will be a big one and discusses the company's strategy for expanding rapidly and deeply into the Indian markets.

Share Market Live

NSE

Below are the excerpts of the interview.

Q: You have got a long association with India, you have been in India for 40 years, or you have been sourcing from India and now of course, you are on the path of expanding your retail operations here. I know it's going to be an omni-channel approach for you in India. But when do we now start to see your new centers go Gurgaon, Noida? When do when do we start to see them come up?

A: First I have to say it is a long association with India, with IKEA. But also India is emotional for me. After leaving six years and years ago in India, so, I am an Indian ambassador by blood. First I want to say that first we have delivered what we have promise, I came some years ago and I said we will invest Rs 10,500 crore. We have invested, we said we will source at least 30% local sourcing, we have done it.

We said we want to start right with the gender equality we want to have 50% women 50% men, it is 46% so we need to improve that so we are proud of that as well. So, we can say first we have delivered our promise.

Where we are now and where we want to go? Where we are now first IKEA love India, second Indian consumer love IKEA so it's a good starting point. Secondly, it's a time also to grow and this is what I find a sweet spot in between IKEA, consumers and the economy. What do I mean by that? It's a time to grow in order to grow what has to happen? First, we have to develop IKEA retail.

Secondly, we need to develop the availability of certified raw materials because it's not only the availability of raw materials, certified raw materials that can be plugging into the global supply chain. Thirdly, it's time to have international standards because this international standard will help not only to increase the quality of the product in India, but also to plug in into the global supply chain. And have India a fantastic opportunity now to be a manufacturing hub for the entire world. So I think time-wise is a perfect time.

At the same time, we have a holistic approach. IKEA started, of course, with the sourcing and we have doubled down, IKEA has doubled down the sourcing from India.

But also we started with IKEA retail. Ingka Group has three businesses, IKEA Retail, Ingka Centers and Ingka Investment. So we are now investing in Gurgaon, and Noida in two very big shopping centers, very big that are coming in less than two years now.

Q: So Gurgaon by 2025?

A: hopefully in less than two years it will be and then Noida, and then many more. But then at the same time, we have set our global business operation in Bangalore where we are exporting services, financial services, digital services, HR services for the whole big company. Also IKEA Foundation is also partnering with many, with the government and with many for the India So it's a whole menu of IKEA because people might see only IKEA a blue and yellow store, but it's a whole menu of IKEA that we are very excited to work together.

Q: What can we now expect what does Rs 10,500 now become as the future promise to India?

A: It's in the making, I know that we love to have headlines with the number, it is in the making. What we are doing now, we are at phase two actually before we started associating many years ago then phase I is the beginning, and phase two is grow and development. What does it mean? It is in the making because we want to see how can we combine the production possibilities, and the social possibilities with that retail growth.

Then at the same time, we are now exploring how can we really go faster and deeper in the markets where we are in India. When we combine these two we can come up with the right number.

Q: The India Business has seen a growth of over 70% in financial year 23, sales of over Rs 1,000 crore? What's the aspiration of growing this business over the next five years I would imagine that will link back to the number that you are going to put forward?

A: I like to say, we have doubled over the last year, we need to double again and double again and double again. You could say that from the retail point of view, we have been five years now we are thinking the next 100 years and then how big is it? That's why the more we align the retail growth with harmonised standard to secure export this is the magic when the two things will work.

First Published:Oct 13, 2023 6:36 PM IST