Financial Daily from THE HINDU group of publications
Friday, Sep 13, 2002
Corporate - Alliances & Joint Ventures
Barista set to enter Sri Lanka; plans ventures in West Asia
MUMBAI, Sept. 12
BARISTA Coffee Co Ltd is in advanced stages of discussion for two joint ventures in West Asia, Mr Ravi Deol, Managing Director of the company said.
The company is slated to make its first overseas foray through a joint venture arrangement with Sri Lanka's Jewelex Trading Ltd. The 51:49 joint venture, Barista Coffee Lanka Pvt Ltd, will launch its first two stores in Colombo in November 2002. Barista will hold 51 per cent and Jewelex the remaining 49 per cent.
"Colombo is a critical market for us. Before we get into competitive markets, we would like to put our brand Barista through a test," Mr Deol said. "Colombo is a vibrant city and has an islander attitude," he said.
The company has identified Sri Lanka as a 25-store market for the initial foray. In the next 12 months, nine Barista stores will be set up. Barista has the first mover advantage, according to Mr Deol. "Transferring Barista to a new location is an experience," he said. However, supply-chain issues are more realistic issues to focus on.
The coffee for the Sri Lankan outlets will be sourced from a roastery in Venice, Italy.
Sri Lanka is a tea drinking country, but its capital city Colombo's retailing attitude is more evolved than Delhi or Mumbai.
According to Mr. Deol, Barista has an added advantage in tying with Jewelex Trading, which has local market knowledge through its associate companies.
Barista, which has set up 110 outlets in India, will be setting up 37 more stores this quarter, the highest number for any quarter so far. "Our annualised turnover in India is Rs 90 crore and we are cash positive," Mr Deol said.
In India, Barista is also looking at the option of franchisee operations. "We are test rolling in a few markets,'' he said. According to him, substantial growth will be seen through franchisee operations. Barista is mainly looking at three segments - work areas, entertainment and travel - to expand in the coming years, he said.
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