The Hindu Business Line : Nilkamal Plastics to enter realty biz

Moving beyond moulded plastic furniture and retail, Nilkamal Plastics is now entering the real estate business. Mr Manish Parekh, Director, Nilkamal Plastics, told Business Line, "We have decided to get into the business of real estate and develop property for commercial purposes. Recently we tied up with a local developer for the same."

The company has forged an alliance with the Mumbai-based Bhoomi Developers for the venture.

It has earmarked an investment of Rs 40 crore - Rs 50 crore. The venture would entail building small commercial properties in Mumbai and renovating dilapidated properties for commercial purposes.

"With our foray into developing real estate, we would be drawing from the group's experiences in setting up factories. It is a big business opportunity for us," said Mr Parekh. Special purpose vehicle

Having forayed into the retail segment by setting up its brand of @home stores, developing real estate is seen as forward integration for the Mumbai-based group. "As we grow in our retail business there is a possibility of floating a special purpose vehicle to further our own retail initiatives," says Mr Parekh.

Considering big retailers such as Pantaloon have already ventured into developing real estate (through Kshitij Fund), exploiting the synergies between the real estate and the retail business is seen as a logical extension of the business.

Retail plans

Nilkamal plans to take its @home stores to 60 in the next three years. Besides, it is open to setting up shops-in-shops with new retailers who are looking at the lifestyle furniture segment. "Most of the existing retailers already have their own brands. But we are open to our brand of stores being part of big retailers as long as the economics of tying up with them suits us. In fact, we have been approached by a couple of hypermarket retail brands,'' states Mr Parekh.

The company is also open to foreign retailers investing in its retail division, "As we are a speciality store brand, we are open to tying up with foreign retailers as and when they are allowed to come into the country," says Mr Parekh. Nilkamal Plastics expects to break even in its retailing venture within the next fiscal.

More Stories on : Strategy | Diversification | Real Estate & Construction | Plastics

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