Expanding its footprint in Europe, UAE-based hypermarket giant Lulu Group has opened a food processing and export hub in Milan.
The Italian base is located at the World Trade Center Malpensa Airport, and will focus on sourcing, processing, storing, packaging and exporting food products from Italy to more than 255 Lulu Hypermarkets spread across GCC countries, Egypt, India, Indonesia and Malaysia.
Chairman and managing director of Lulu Group, Yusuffali M. A., said: “As a key partner in food security for the Middle East, it is our ongoing strategy to set up our own sourcing and food processing units around the world to ensure uninterrupted supply and competitive pricing by eliminating middlemen.”
The main categories to be sourced by the Italian base will be cheeses, chocolates, jams, sweet and puff pastries, organic pasta, infused extra-virgin olive oil and sea salt from ‘well-known Italian brands’. Apart from packed food, the centre will also source and export fruits and vegetables.
This adds to earlier openings in the UK and Spain.
The retailer is also mulling options to expand its base in Europe by adding Germany, Greece and France although the timeline has not been confirmed yet.
In the recent past, the Group has dismissed any suggestions that Western Europe represents the next big opportunity for a retail presence through its hypermarkets.
Instead, it has been focusing on creating supply and food processing centres to feed into the store networks it operates elsewhere.
“So far, we have no plans to launch Lulu hypermarkets in Europe. Now, that’s not the same as saying we will not do that ever.
“We will be initially exporting worth 50 million euros and expect to reach 200 million euros in two years. We are tying up with Italian farmers’ cooperative societies to source fruits and vegetables, which will surely have a very positive impact on the agricultural sector of Italy. In addition, this project will also generate significant employment in Italy.”
Ahead of a planned IPO, the retailer is rapidly expanding its retail operations and sourcing networks.
Lulu Group has a turnover of $8 billion and employs more than 65,000 across its network. It has been rated as one of the top 50 fastest-growing retailers in the world by Deloitte.