Times of India reports:
Direct selling major Amway plans to make India an export hub for its operations in Middle East and South Asian countries, even as its business growth here has slowed down due to lack of clarity for applicable regulations.
The company also said there is an urgent need for detailed regulations to distinguish genuine direct sellers from sham players and to give a sense of legitimacy to the industry.
We need more clarity in the regulations so that the growth level is up. Few years ago, it had a very strong double digit growth which has slowed down and there is a need for a better understanding of legitimate direct selling company, Amway managing director & CEO William S Pinckney told PTI.
Amway, which is setting up Rs 600 crore unit at Nilakottai in Tamil Nadu is also looking for further expansion along with additional plant as the company is mulling to make India a hub for its Middle East and neighbouring countries as Sri Lanka, Bangladesh etc.
We are looking outside Indian markets, like Sri Lanka, Bangladesh, UAE, Middle East. We think and believe that India can be an export hub to those market. That could cause us more quickly for look for more investments to support that manufacturing push. we do think that more investments are coming in, he added.
However, Pinckney denied to share amount to be invested and said: It would be driven by demand. We have not yet moved to any market as Sri Lanka, UAE or Bangladesh. Its only matter of time, I say 3 to 5 years, once that happens and with the growth in India, we think that we would get to a point where we would not have any capacity and have to invest.
We could expand the current facility or would consider another facility at another part of India, he added.
Amway, which is aiming a business of Rs 6,000 crore by 2020 said that its Tamil Nadu unit would be operational by end of March next year and it would focus on health and beauty products.
Pinckney was arrested in May this year by the Andhra Pradesh Police under the Prize Chits and Money Circulation Schemes (Banning) Act (PCMCS) and was released after two months. Earlier also, he was arrested by Kerala Police on charges of alleged financial irregularities under PCMC Act.
Stressing the need to identify the sham companies running pyramid schemes under the guise of direct selling, he said: That is a challenge for the industry … to continue with very strong growth path is to legitimatize it (the industry) and identify the good folks over the folks who are not good.
Pinckney added that due to lack of clarity, investments in the sector are on hold and waiting for an appropriate legislation in the field.
Its absolutely about lack of clarity in terms of future. Our products are sold by independent entrepreneurs. You would not invest your time when you do not know what the future is. You will wait to see there is an appropriate legislation and clarity in the field, Pinckney said.
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