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Our Bureau

Kolkata, May 27

Bata India has put its best foot forward to secure a toehold in supplying boots to the Defence forces. It also plans to penetrate rural markets in a big way.

According to Mr P.M. Sinha, Chairman, Bata has applied for enlistment as a supplier of mountain, assault, and regular boots. “Defence forces require a total of 12 million pairs of boots every year. Only unorganised players have been suppliers to the forces so far,” he said.

For producing foot safety products, including for the Defence forces, the company has installed two new machines at its plant near here. Mr Sinha said that Bata India has obtained technology for such boots from its overseas parent, which supplies these items to the Chilean Defence forces. Bata India has set up a dedicated team, headed by a former Army man, to achieve the breakthrough in the new area.

For the rural markets, the company is working on a strategy. The plan entails a fresh thrust into these markets, largely untapped by the company so far. A mix of wholesaling and retailing may be part of the strategy. The plan may be rolled out for implementation shortly, Mr Sinha added.

The management opted for these initiatives to extend the marketing horizon of its products. In the retail segment, Mr Sinha said the company’s big stores were now stocking a wider range of leather accessories — a hundred mostly outsourced items — as added merchandise.

In the last couple of years, the company undertook a major restructuring encompassing renovation, closing of unviable stores, introducing franchisees, larger formats and space. The chairman said the exercise was complete and there are no unviable stores now. Currently, it has around 1,200 stores countrywide of which 200 are large-format and sport a new look with extended time. “Some of the shops have been given to former employees on management franchise contracts and some private owners have also been allowed to run shops under different arrangements.” The company plans to add around 60 shops this year.

He said in the past 16 months rentals for the shops have reduced by around 15 per cent through renegotiations.

Retail currently contributes around 80 per cent of Bata India’s sales. Institutional sales, particularly of safety shoes for industrial use, however, have created a new segment where margins are better than in the wholesale business.

Mr Shaibal Sinha, Director (Finance), said that in 2008 Bata’s gross margin improved 3 per cent over the previous year. “Since 2005, the gross margin has gone up 16 per cent so far.”

The officials were talking to newspersons after Bata’s 76th AGM on Tuesday. The company has also given a push for exports to Europe and Asia.

“In terms of technology, capability and costs, we are competitive now”. Cost-control, reduction of working capital cycle and absence of fresh borrowing would keep the momentum, the chairman said.

More Stories on : Rural Marketing | Leather

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