IndiaRetailBiz

Union Budget 2008-09 presented on Friday, which provides for 16% exice duty concession on certain cold chain refrigeration equipment could encourage retailers to set up their own back-end logistics, says a Business-Standard report.

“It is effectively a 16% saving on the capital cost, which is substantial. The supply chain infrastructure is made of many other expensive components, besides refrigeration, but this is definitely a step in the right direction. We will be able to revise our capital cost estimates down slightly, and the saving would flow to the consumers at the end of the chain,” says Andrew Levermore, Chief Executive Officer, Hypercity.

“There are certain imported food items we cannot bring in due to absence of a proper cold chain support. Also, the supply chain will become more efficient as wastage will go down,” added Levermore.

B.S. Nagesh, Customer Care Associate & Chief Executive Officer, Shoppers’ Stop, said that, felt that while achieving a particular scale was necessary for a retailer to be able to set up back- end infrastructure, boost to cold chain facilities would help the business.

However, A.K. Joshi, Executive Vice-President and Chief Operations Officer, EM&RBG, Voltas Ltd, although clear about intent and direction of the government wanted to wait until details of the exemption were known. “The range of the products covered under exemption of excise duty has been increased. It is clear that the FM wants to encourage cold storage, but to what extent, we will only know once we get the blueprint of the proposal,” said Joshi.