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News & Views on Indian Real Estate

Thursday, August 07, 2008

Alchemist Group eyes hospitality


The Chandigarh-based Alchemist Group is planning a big bang foray into the hospitality sector with an investment of Rs 1,300 crore over the next two years. The plan includes a huge fine dining, quick services restaurant chain and five-star hotels. The Rs 7,000-crore conglomerate, which has interests in real estate, food processing, healthcare, pharma and aviation, will build five brands including fine dining restaurants specialising in varied Indian cuisines. The group will open 100 restaurants under these brands in Indian cities and overseas markets like Geneva, Dubai, Los Angeles, New York and Chicago. As a part of its debut in food & beverage (F&B) retail, Alchemist Group is also setting up 1,000 quick service restaurants (QSRs)-Republic of Chicken (ROC)-across the country at an investment of Rs 800 crore. The group claims to be a quality supplier of safe poultry products and wants to carry the same marketing plank for ROC launch. Earlier this year, it had signed up actor Mithun Chakraborty as brand ambassador for the new brand. ROC will be franchise based, with outlets of varied format including takeaways and dine-in. The company has identified locations and will initially focus on the chain's roll out in North India, particularly in NCR. "We see great potential in F&B retail and will go it solo in our foray," says Alchemist Group chairman Kanwar Deep Singh. "The ROC launch will make us a fully integrated player in the business and allow us to control the entire poultry chain from hatching, breeding to retailing. And since the margins after value addition are high, it makes sense for us to get into F&B retail." The group has a poultry processing plant in Banmajra, Punjab and has spent about Rs 125 crore on integrating its poultry processing and selling venture. While all ROC outlets will be leased, the group will leverage its land banks across India to set up five-star hotels in Ludhiana, Udaipur and Kolkata. "We plan to launch real estate SPVs in collaboration with the Renaissance Group. The capital for all initiatives will be generated equally from internal and external sources," adds Singh. According to industry sources, Indian food & beverage retail market is valued at Rs 25,000 crore growing at 25 percent per annum. Also on the anvil is expansion of the Group's hospital chain. Currently, Alchemist operates two hospitals, one each in Gujarat and Punjab set up at a cost of Rs 100-crore each.