Big Retailers, Wal-Mart and Tesco Go Above and Beyond For India
What are your corporate strategies during the recession and afterwards? According to ABC News, large retailers, such as Wal-Mart, Tesco and Carrefour, it is to merge into the Indian market…but for what price?
The poor infrastructure, vast regional differences and laws limiting foreign firms to cash-and-carry wholesale outlets and franchise tie-ups with local partners in the $450 billion retail market, it’s been a challenge all three large retailers have agreed to take. Since the recession has begun and Westerners are slow to pick-up their spending, these retailers believe it’s crucial to expand into the Indian marketplace.
“The supply chain is one of the big challenges,” Raj Jain, chief of Wal-Mart India. “We are willing to invest whatever it takes in the supply chain, the back-end. But that in itself won’t deliver all the efficiencies,” he said, arguing for fully opening up the sector.
Carrefour also struggles to maintain it’s supply chain.
“There are many, many layers, with commission agents, wholesale markets, distribution agents which increase time to market and costs,” said Yannick Douville, a Carrefour director.
Even the wealtiest of the world’s top retailer, India is a challenging market to step into because of things such as tiny farms and differential policies and taxes in every state.
ABC News gave a example of what the retailers are doing to ensure quality and accuracy in their supply chain and business plan. In the village of Haider Nagar in Punjab state, where Wal-Mart sources vegetables such as cauliflower and gourd, the retailer built toilets to prevent soil contamination, and teaches farmers about transplanting and nutrient management and the use of low-cost innovations to get a higher, better yield.
Recently, the government unveiled concessional duties and tax exemptions for refrigeration units and allowed external commercial borrowings for cold storage facilities.
But, is it enough to invest?
“Unless there is a big front-end no one’s going to invest billions of dollars in a cold chain or supply chain just to sell to some mom-and-pop stores,” said Technopak’s Singhal.
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New Management Dynamics, FTZ Corp. Partnership to Save Companies Millions
Management Dynamics and FTZ Corporation Announce Strategic Partnership
Alliance will Integrate and Expand the Use of Foreign Trade Zones in Global Trade Management
EAST RUTHERFORD, NJ, May 12, 2010 – Management Dynamics, a leading provider of Global Trade Management solutions, today announced a strategic partnership with FTZ Corporation, a leading provider of Foreign-Trade Zone consulting services and developer of the SmartZone Premier application. The partnership seeks to expand the use of foreign-trade zones integrated with core Global Trade Management (GTM) processes of import, export and trade agreement management.
Foreign-Trade Zones have been in use for nearly seventy six years with the passage of the Foreign-Trade Zones Act of 1934 to expedite and encourage foreign commerce. Foreign-Trade Zones are now a key component of U.S. trade policy and offer companies several opportunities to reduce costs with:
- Exemption of duty payment upon re-export of goods
- Relief from inverted tariffs where raw materials with high duty rates can be transformed to an end product with a low duty rate
- Use of consolidated weekly entries to reduce merchandise processing fees (MPFs)
- Deferral of duty on any inventory stored within an FTZ
For many companies these benefits can justify the investment in a Foreign-Trade Zone in the first year of operation.
“Foreign-trade zones are becoming an integral part of a company’s GTM strategy and their use is expanding given the strong value proposition and fast pay back,” said Craig Pool, President, FTZ Corporation. “Our customers are looking to integrate foreign-trade zones across their GTM processes and we look forward to working with Management Dynamics to deliver this solution.”
FTZ Corporation has extensive experience, having implemented over two hundred and fifty Foreign-Trade Zone projects. The company is also active in Washington D.C. with involvement in recent industry advancements including the passage of Weekly Entry legislation and opening up the benefits of Foreign-Trade Zones to new industries. FTZ Corporation offers a complete set of implementation services including the application to the FTZ Board and activation of the zone with Customs and Border Protection. Combined with the implementation of SmartZone Premier software, FTZ Corporation can cut the time to first benefit with a “turnkey” implementation.
“Implementing a foreign-trade zone program can generate millions in recurring savings and is a key initiative for companies as the global economy is rebuilding,” said Jim Preuninger, CEO, Management Dynamics. “FTZ Corporation has a tremendous track record of success in this industry and we look forward to working together to expand the GTM market.”
About FTZ Corporation
The Foreign-Trade Zone Corporation is the only nationally recognized consulting firm with a practice focused on Foreign Trade-Zone consulting. The firm provides a wide range of consulting work from Foreign-Trade Zones Board applications to activations with Customs and Border Protection, and administers nine foreign-trade zone projects. Its management of these projects is in keeping with the Foreign-Trade Zone Corporation’s philosophy that there is no substitute for hands-on-experience.