Exports have already begun to Sri Lanka, where it opened in October 1998, and trial shipments have commenced to Hong Kong and Middle East. "Things are becoming global in nature. Once you set up a supply chain in a strategic location it can service other countries as well," said Amit Jatia, managing director of Hardcastle Restaurants, joint venture partner of McDonald's in Mumbai.

Costs in India are also among the lowest in the world, estimates Jatia. The price of a McDonald's burger is lowest in India as compared to the 109 countries in which it has outlets. It is lower than Sri Lanka or Pakistan and 50 per cent less expensive than the United States. This could be dueto number of factors like the tax structure, he said. Typically, McDonald's starts developing its supplier chain when it opens its first outlet in a country. In India, however, 95 per cent of the ingredients were sourced locally from day one, according to Jatia.

Most of McDonald's international suppliers have formed joint ventures with local companies - OSI Industries (its largest supplier of chicken range products) has entered into a joint venture with Maharashtra-based Cardinal Foods to form Vista while Kitchen Range Foods (primary supplier for vegetable range products) has entered into joint venture with Vista. This has enabled the companies to get the latest food processing technology and comply with standards like HACCP (Hazard Analysis and Critical Control Point). "We are among the top three food processing plants in India," claims Vista CEO Jose Azavedo whose Rs 20 crore plant has been designed in the US. Azavedo plans to export onion rings and coated mushrooms to Kitchen Range in UK and Germanyusing the "advantage of low cost labour and low cost onions". Like other suppliers, it is already exporting to McDonald's in Sri Lanka and expects to begin supplying to Middle East by the year end. "If the project works out we should be exporting 600 metric tonnes of onion," said Azavedo.Dynamix Dairy Industries, which supplies to Britannia and McDonald's in India and Sri Lanka, will also start supplying to outlets in other Asia Pacific countries like Singapore. "We see more potential as they open more outlets. It is exposing us to overseas markets -- we are certainly looking at more exports," said Satyen Bhalla, President Operation. The firm has done around $ 12 million exports to Erie Foods, one of McDonald's global suppliers. Schreiber Foods of USA has a stake in Dyanamix and is represented on its board of directors.

So far, McDonald's India has invested close to Rs 250 crore. And although business has been doubling every year (two outlets every month) it is yet to break-even. "We are still to recoverour investment. You need a very large base and break-even is normally only after seven to ten years," said Jatia. China, for example, has seen exponential growth with 200 outlets.