Although the proposal has been finalised, a government source said the formal MoU for the project, along with many others, would be inked during the Global Investors’ Meet (GIM) to be held in January 2019. The move could boost investor sentiment as the Rs 75 crore mega business event would roll out next year. “Ikea has been looking for connectivity, vis-à-vis proximity to metro stations. So, the company will acquire land parcels alongside Metro extension routes in Chennai. The CMRL authorities will oversee the transaction,” said a government official, in the know of developments.
Having pitched its tent in Hyderabad and Bengaluru, the setup in Chennai will solidify Ikea’s footprint in the south. Across the world, the Swedish MNC has considered metro connectivity as one of the primary criteria for flagging its presence. Last year too, it had bought a 14-acre land parcel from Bangalore Metro Rail to foray into the Garden City. Anticipating over 5 million footfalls annually, it has earmarked a whopping 4.5 lakh sq ft for the store in that city.
Ikea India’s domestic footprint will be covered by its plans to set up 25 stores by 2025, investing a whopping Rs 10,500 crore. It is reliably learnt that Ikea is evaluating a similar approach in Maharashtra, where it plans to invest Rs 750 cr and is scouting for land close to the Metro station. Initially, it will take the MoU route to avoid the hurdles faced by retail behemoth Walmart. The retail policy entails overseas companies having to mandatorily source 30 per cent of their wares locally, preferably from small suppliers.
“The Chennai announcement is on the cards, but the formal MoU signing is expected to take place during GIM,” the official said and added that a few more big-ticket investment projects would get formalised during the meet. “There won’t be MoU signings reported on a day-to-day basis henceforth. All energies will be focused on the GIM, where a majority of the projects will be announced,” the official said.
Among the projects that will be inked as MoUs at the GIM to showcase TN’s status as an investment hotspot are the entry of European auto giant PSA Peugeot, which will set up its plant at Tiruvallur, where the erstwhile Ambassador plant of the CK Birla group existed. The expansion announcements of Ceat, Nissan, Hyundai and Ford are also likely to figure at the mega business event.