To augment its storage capacity, Reliance Retail is seeking to hire capacity with the government-owned Food Corporation of India. This has been complemented by low foodgrain stocks with FCI and the surplus storage capacity.
FCI has planned to rent out one of its storage facilities in Barabanki district, on the outskirts of Lucknow. The facility with 3 lakh tonne capacity is strategically located to cater to Reliance Retail's needs in Lucknow and Kanpur.
Sources close to the development said Reliance was planning to hire this capacity and talks were on between the government and the company.
"The terms for renting out the facility are being negotiated between the two parties," said an industry source. So far, FCI has rented out 7.7 lakh tonne capacity in the current financial year and has earned Rs 12.58 crore (Rs 125.8 million) revenues.
FCI is renting out storage capacities as it is carrying low foodgrain stocks due to a reduced procurement of wheat.
Reliance, ITC, Cargill have storage capacities hired from the Central warehousing corporation and state warehousing corporations.
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