In order to open its wholesale outlets across the northern region, Thai cash and carry firm Siam Makro will invest more than Rs.1,000 crore in the next five years in India.

The company, part of the $50 billion Charoen Pokphand Group, has claimed that its investment would generate over 5,000 direct and indirect jobs in the country.

Siam Makro’s immediate plan is to open 15 outlets in India over the next three years under its local venture LOTS Wholesale Solutions.

The company which has 123 stores in Thailand, plans to open the 15 stores in the first phase in Delhi-NCR, Punjab, Haryana, Uttar Pradesh and Rajasthan. “We will start our expansion through NCR.

And we would like to focus on the northern part of the country initially. We will follow the cluster model of expansion rather than spreading across the country,” said Sameer Singh, director of operations and business development at LOTS Wholesale Solutions.

The proposed investment will be used into building infrastructure, getting manpower, setting up the supply chain and opening stores.

“Then, as and when there is a requirement for further investment, we will take a call,” observed LOTS Wholesale solutions managing director Tanit Chearavanont.

He said that the first two stores would come up in the National Capital Region in the beginning of the second half of 2018.

In India, Siam Makro plans to open smaller stores compared to its large-format outlets at home in Thailand.

“When we first started the Makro business we used to build very large stores in Thailand in the range of 10,000 square metres. We then started moving towards 7,500 sq m and then to 5,000 sq m stores. We have recently started opening 2,000 sq m and 1,000 sq m stores as well,” said Chearavanont. “In India, we will definitely not build the 10,000 sq m stores, but we are also looking at opening stores in the 4,000-5,000 sq m space. That will allow us to be closer to our customers,” he added.

As much as 70% of items in it’s cash and carry stores comprise food items.

While Siam Makro will not get into food retailing segment under LOTS Wholesale Solutions, it may consider getting into that space through other subsidiaries so as to take the benefit of the local policy that allows 100% foreign investment in food retailing.

“From a group perspective, we would evaluate getting into food retailing through our other subsidiaries that are more focused on that part of the business. For this business (Makro), we have always been a B2B wholesaler. We have never changed course from this business,” Chearavanont added.