McDonald's to invest Rs 300 cr for expansion in India

McDonald's to invest Rs 300 cr for expansion in India

The international fast-food giant is looking to set up about 40 outlets this financial year, adding to the existing 188 across the country.

International fast-food giant McDonald's would be investing over Rs 300 crore for expansion and bolstering its operations in India.

Vikram Bakshi, managing director (North & East India), McDonald's, said they would be setting up another 40 outlets this financial year to their existing chain of 188 outlets in the country. "We would be investing around Rs 3 crore per outlet. These outlets would be coming up across India," he said, on the sidelines of the India Retail Forum 2010 in Mumbai.

McDonald's has plans to set up about 50 to 60 outlets next year.

Other than Rs 120 crore on expansion, it would be investing around Rs 100 crore to set up 25 drive-through format outlets over a period of three years. Drive-through is a type of service provided by a business that allows customers to purchase products without leaving their cars. The format was pioneered in the US in the 1930s but has since spread to other nations. The firm operates around eight drive-through outlets in India.

Bakshi said they would also be investing around Rs 100 crore this fiscal on setting up a food processing plant in Punjab, which could cater to all the outlets in India. The firm already has a foodprocessing unit in Punjab.

The firm sources all its raw materials from India itself. "Initially, we used to source our French fries from overseas. Recently, we have managed to get the same quality potatoes from Himachal Pradesh. We are looking at similar options from Gujarat now," he added.

Lack of infrastructure has been putting a lot of strain on McDonald's India's profit margins. "We don't get the same quality of pure drinking water for all our outlets. So we have to set up water processing units to convert hard water. Also, many parts of the country don't have continuous supply of electricity, so generators have to be set up to ensure continuity.
 All these factors reduce our margins by at least five per cent in India," Bakshi said.

McDonald's has plans to set up 100 per cent pure-vegetarian outlets in the country in the near future, he added. On the chain's India turnover this calendar year, Bakshi said there would be a 30 per cent jump. "We have set a target to double our revenues every three years."

Courtesy: Mail Today