Sri Lanka has become an expensive destination in terms of food prices compared to other countries, an international pizza chain’s franchisee observed.
Domino’s Pizza franchise holder for Sri Lanka, Jubilant FoodWorks Ltd. (JFL) of India CEO Ajay Kaul believes that Colombo food prices were higher due to most ingredients being imported.
The company has invested upto Rs.200 million in 2011 and would be injecting a further approximately Rs.300 million for expansion plans this year.
Speaking with the Business Times on Wednesday in Colombo, he said the stable political climate and expected economic climate that was “exploding” were key reasons for investing in the country.
Having taken over the reins from the former Sri Lankan franchise holder, JFL have already established two food stores in the country and would be increasing to at least six within this year.
He pointed out that retail development was a challenge and observed there were an insufficient number of vendors to supply the necessary ingredients.
In this respect, the company was compelled to import all its ingredients, Mr. Kaul said adding that the government needs to relax import duties.
He pointed out that the prices should come down for business to become profitable adding that they would work with respective industries in a bid to ensure that in the future these ingredients could be obtained from within the country.
With the fast changing Sri Lankan lifestyle, he noted more people were taking to fast food and were now becoming more exposed to these types of food in the wake of their increasing disposable income levels.
Having commenced with two stores the company hopes to establish five or six within the course of this year, he said with outlets (to be) located in Rajagiriya, Kotahena, Ja-Ela, Kottawa, Maharagama, Wattala, Moratuwa, Negombo, Bambalapitiya and Union Place.
With business expected to breakeven within three years, they would be employing 1500 during the next two to three years with plans to set up 25-30 stores within the next five years.
JFL provided training for 50 Sri Lankan youth in India for more than a month to ensure they would be able to meet upto the required standards.
Currently the operation in Sri Lanka is carried out through the establishment of Jubilant FoodWorks Lanka Pvt. Ltd and over a period of at least five years they expect to invest approximately Rs.2 billion.
Domino’s Pizza would tap on its core market in the age category of 22-35 years as they would be the ones that would come home late with both partners working and wanting to have food consumed at home or outside.
A factory has been established in Biyagama with a capacity to handle 50-70 stores, however, within one and a half months they would be servicing only the current outlets, Mr. Kaul said.
He noted that the proprietary recipes with two or three types of dough would be manufactured at this factory and it would also become the redistribution point in the future for all stores. This highly automated factory has provided jobs for 25-30 staff.
The delivery service would be within 30 minutes or free thereby providing a very efficient customer service, Mr. Kaul said.