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KD Singh puts Republic of Chicken on sale

Poultry retail outlets business facing competition from unorganised segment

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Businessman and politician Kanwar Deep Singh, known in some circles as Chicken King, is planning to sell his Republic of Chicken brand of retail outlets and also the business that includes the entire poultry farming chain from breeding to processing.

Singh, who is also a Trinamool Congress member of Parliament in Rajya Sabha, has decided to sell partly or fully the stake of his listed entity Alchemist Ltd in Alchemist Foods Ltd that runs the retail chain Republic of Chicken across northern, central and eastern India.

"In light of the changing economic scenario and due to increasing competitive environment particularly from the unorganised sector, the company has decided to focus on its core business and to improve its working capital, so it has been proposed to dispose of the investment of the company by way of sale of shareholding of the company in Alchemist Foods," Alchemist, which dabbles in pharmaceuticals, chemicals and minerals, has told its shareholders.

Republic of Chicken runs over 100 retail outlets in Delhi, Chandigarh, Punjab, Haryana, MP, West Bengal and Rajasthan serving products including raw, portions and frozen processed items.

But despite expanding at a modest pace and launching its own app, just to keep up with the fast changing times, Alchemist Foods's financials are weak – with a turnover of just Rs 96.62 crore in fiscal 2015, it had suffered a pre-tax loss of Rs 19.89 crore.

While finance remains a problem for Alchemist Foods, with eating out becoming more popular in big and small cities, there is growing opportunities for food chains.

At the same time there are many challenges before chains like Republic of Chicken.

"There is enough of opportunities for quick service food chains. However they have to be very clear about the consumers they are taking care of. The segmenting of consumers is important in food and they have to have a unique selling proposition, maybe any particular or multiple product on the menu that they sell. Unless one has some USP for which consumers would come back again the business won't work," Retailers Association of India chief executive officer Kumar Rajagopalan told dna.

And with food ordering undergoing a major change, thanks to apps, making possible ordering from aggregators rather than single outlets, competition is turning all the more tough, he said.

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