The Hindu Business Line : Khadi goes corporate; joining hands with FMCG majors

The home-grown Khadi Village Industries Commission (KVIC) is turning out to be a much sought-after sourcing base for several fast-moving consumer goods (FMCG) companies.

While Hindustan Lever already has an existing contract manufacturing tie-up with the KVIC's Jharkhand unit for the production of soaps and detergents, KVIC is also in active discussions with other FMCG majors such as Marico Industries and Godrej Consumer Products Ltd for similar arrangements, Dr Mahesh Sharma, Chairman, KVIC, told Business Line.

"The tie-up with Godrej Consumer Products has already been finalised and initiated for the manufacture of the company's consumer products, and we are in discussions with Marico Industries for the production of their personal care products," Dr Sharma said.

Retail chain Shopper's Stop, on the other hand, has begun sourcing handicraft and handloom products from KVIC's Gujarat unit.

At the KVIC level, discussions to tie up with corporates are being carried out by the recently set-up Confederation for Promotion of Khadi & Villages Industries (CPKVI), a unit set up by the former for the promotion of its basic mass consumer products such as soaps, shampoos, perfumes, honey and ethnic processed foods, besides the core business of handloom and textiles.

Elaborating on KVIC's global plans, Dr Sharma said that close on the heels of signing a memorandum of understanding (MoU) with the South African government for the promotion of khadi products, the latter would use South Africa as a base to service other countries in Africa and Europe.

KVIC already exports khadi and handloom products to the US, Canada and some countries in Europe.

Meanwhile, an investment of Rs 2,000 crore has been allocated for research and development of biotechnology-related processing industries with a special emphasis on organic and herbal products, Dr Sharma said.

He added that the overall investment by KVIC was likely to be about Rs 7,500 crore during the Tenth Plan period, of which close to 30 per cent would be set aside for research and development of bio-processing products.

The KVIC recently announced that its consolidated sales turnover (including exports and non-FMCG products) for 2002-03 was in excess of Rs 10,000 crore.

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