Rajesh Exports announces Joint Venture with Muthoot Pappachan Group for retailing

Rajesh Exports Ltd has announced that the Board of Directors of the Company at its meeting held on March 20, 2007, has approved a comprehensive agreement with the Muthoot Pappachan Group for retailing of its products across the length and breadth of South-India.

The Muthoot Pappachan Group is one of the largest NBFC's in South India based at Kerala with operations spread across the five states of South India. The Muthoot Pappachan Group has 450 outlets in the states of Kerala, Karnataka, Tamil Nadu, Maharashtra and Andhra Pradesh. Under the Tie up, the Company will manufacture "Shubh Muthoot" pure Gold coins of 1,2,4,8 and 20 Gms. "Shubh" is a brand owned by the Company. The Gold coins have been exclusively designed by the R&D team of the Company.

The 68 years old Muthoot Pappachan Group has a loyal & established clientele of about half a million customers. The objective of the Joint venture is to herald a revolution in the retailing of gold products in South India which is the largest Gold consumption market in the world. With this Agreement the Company will be able to retail Gold coins to a wide segment of population across the four states of South India and Maharashtra. Based on its exceptional backward-integration strengths and global-leadership position in the manufacture of Gold coins, the Company will be able to offer a large range of Gold coins embossed with the "Shubh Muthoot" guarantee with different religious symbols.

The "Rajesh Exports Ltd. & Muthoot Pappachan Group" combination will be in a position to offer an excellent pricing to the consumers, compared to any of the existing banks engaged in the sales of Gold coins. The Joint venture would also have a better reach in South India compared to any of the banks. The Joint venture has developed an advanced software solution to provide live and online gold price across all the outlets of "Muthoot". The coins will be sold at Online Gold prices to the customers, it would be the first-of-its-kind facility offered to retail clients anywhere in the world.

This would result in the customers getting Gold coins at much lower prices than any of the existing banks. The software would also manage and maintain an online inventory of Gold coins for all the outlets. The Muthoot Pappachan Group would also extend the popular "Swarnavarsham" scheme to the buyers of the "Shubh Muthoot" Gold coins, which would further facilitate the purchase of the Gold coins, due to availability of easy finance to fund the purchases.

The Joint venture is expected to significantly increase the Company's retail presence in South India ahead to the launch of its ambitious "Shubh Jewelers" venture. The Tie up will also add significantly to the Top-line and Bottom-line of the Company's beginning from first quarter of the next Financial year.

Mr. Rajesh Mehta, Chairman of the Company, announcing this at Bangalore today, said "We are accelerating the pace of implementing our retail plans. We have already set up the national retail network of 30 Laabh retail stores across 23 cities in the country in a record time of 4 months. We are pleased to have a Joint venture with the Muthoot Pappachan Group which would bring in revolutionary savings product at the most affordable prices to the large mass of people across the four southern states of India."

Source : Equity Bulls

Keywords