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Latha Venkatraman
Virendra Verma

Mumbai , Jan. 12

WHAT'S an adhesive company doing in the snack market?

Unthinkable it may seem but Pidilite Industries Ltd, makers of Fevicol, an adhesive brand, has launched a snack product.

The Rs 750-crore companyis testing the snack market with sweet crispies under the brand name `Chikkers'.

At present, the product is under a test launch, said Mr Apurva Parekh, a senior company official. "In line with our strategy to grow consumer and bazaar products business, we have launched a snack product," Mr Parekh said.

The test launch is being undertaken in suburbs of Mumbai and nearby satellite towns. The product is available in three flavours and priced at Rs 5 per packet. The company is carrying out promotional offers to launch this product.

The national rollout and decision to launch other products will be decided after the test launch, he said.

The company's entry into the snack market appears to have flummoxed equity analysts. They said that snacking products business is clearly not in line with Pidilite Industries' profile though it is seen as a quasi-FMCG company because of its large portfolio of consumer products.

India has a huge snack market, most of it fragmented regionally and in the unorganised sector. Pepsi Foods made an entry into this market a few years ago. "The market is huge but most of it is in the unorganised sector and brands if any largely cater to regional tastes," said one analyst.

More recently, a number of basmati rice companies made a foray into the snacking market, notable ones being Satnam Overseas, owners of the Kohinoor brand and LT Overseas Ltd, owners of the Dawat brand of basmati rice. Satnam which had earlier moved into food products under the brand name `Kohinoor Heat and Eat' got into the snack market with `Kohinoor Numkeenz'. LT Overseas launched a snack comprising basmati rice under Dawat.

Pidilite, which reported a net profit of Rs 18.11 crore on a turnover of Rs 203.73 crore for the second quarter endedSeptember 2004, has been faced with rising raw material costs. However, analysts believe that the company could pass on price increases to end-consumers because it has very strong brands in Fevicol, M-Seal and Dr Fixit.

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