The government has made it compulsory for workplaces to have creches either on their own premises or within 500 metres, and manned by trained personnel.
MUMBAI: Sodexo, best known for its meal passes and housekeeping services, will soon be taking care of your children while you are at work. The 20-billion-euro French company is drawing up plans to foray into creche management through acquisitions, said a top executive.
The move is driven by the potential of the Rs 25,000-crore daycare market, which is growing 23% annually, and government policies that mandate establishments with at least 50 employees to provide creche services. The entry of Sodexo, the world’s second-biggest catering services company after UK’s Compass, into India’s daycare sector is an extension of a business it already runs globally.
“The changing social fabric in India — where both the parents are working and there’s no one to take care of the child — and the diminishing joint family set-up, among other factors, have prompted us to evaluate opportunities in creche management,” said Sodexo India president Rishi Gour. “There are some companies that have already built a robust daycare business model and we will take the M&A route to enter this segment,” Gour added.
If all goes well, this will be Sodexo’s third acquisition in India, a market it entered in 1998. In 2009, it acquired Radhakrishna Hospitality Services for Rs 520 crore. Four years later, it followed up with the purchase of MacLellan’s India unit. Gour said that Sodexo aims to be in the childcare solutions business in India by the end of August 2020. Sodexo’s plans follow Europe’s largest childcare company Babilou’s purchase of Chennai-based Amelio in 2018. Some of the other players in India are Klay, Ipsaa, Vivero, The Learning Curve, Kanchana Paati, Footprints and Safari Kid.
The government has made it compulsory for workplaces to have creches either on their own premises or within 500 metres, and manned by trained personnel. Companies, as a result, are either doing it on their own or relying on third-party services. It is in the latter segment that firms like the Euronext Paris-listed Sodexo are eyeing a slice of the pie. Since Sodexo is already into facilities management, it will be easier for it to venture into childcare services.
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Rules mandate that creches should be operated for at least eight hours and, if employees are on shifts, then the facility should be kept open accordingly. With major players like Babilou and Sodexo throwing their hats into the ring, the highly unorganised childcare market is expected to be streamlined and consolidated. Sodexo’s plan is to have a play in the on-site creche management business as well as have standalone creches in neighbourhoods.
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