The Hindu Business Line : Britannia eyes new segments for growth

IN an effort to bring about future growth, Britannia Industries Ltd is looking at new business opportunities beyond biscuits but within the larger ambit of the food sector.

The company is hoping to increase its revenues through both the organic and acquisition route, according to Mr Nusli N. Wadia, Chairman of Britannia Industries, who chaired the 86th annual general meeting of the company here.

Ms Vinita Bali, the newly appointed Chief Executive Officer of Britannia Industries, said the company was looking at several business opportunities. "However, this is not the right time to say which these business sectors are. We are looking at those opportunities which have a preferably good rate of return but it would be a food item only," Ms Bali told reporters after the meeting.

Responding to a shareholder's query, Mr Wadia said Britannia had no plans to enter the noodles and pasta market as it was not a lucrative opportunity. In this context, he said that Nestle, present in this market for more than 15 years, has just started reporting profit from this business.

Regarding acquisitions, Ms Bali reaffirmed what the Chairman had told the shareholders, and added that Britannia was open to inorganic growth. However, for the current financial year, 2005-06, the company was hoping to register a 10-12 per cent topline growth.

For the year ended March 31, 2005, Britannia Industries recorded a turnover of Rs 1,615 crore, against Rs 1,470 crore in the previous fiscal. Profit after tax increased to Rs 148 crore from Rs 118 crore. The company declared a dividend of 140 per cent.

Earlier, addressing the shareholders, Mr Wadia said Britannia's market share was 37-38 per cent. Despite several references to ITC's Sunfeast biscuit brand, he remained unperturbed and said that it was "one more competitor" in the market place.

He said that the new plant of Britannia at Uttaranchal had been commissioned and it would produce 45,000 tonnes of biscuits. The company has started operating in the commodity exchanges.

"We have started hedging our commodity purchases through these exchanges but we feel that these are initial days. We feel that the exchanges in the country are still immature," he said.

Mr Wadia reiterated that the Mumbai plant had been closed. Most of the employees had been offered VRS but a few were still not accepting it. In this context, he said that in 2004-05, the company offered VRS to more than 200 people and the process would continue this year but there are no internal targets.

The company had already withdrawn from the fresh milk business. Mr Wadia described the decision to enter the sector as "not right". Ms Bali said there were no other businesses, as of now, from which the company wanted to withdraw.

Manekshaw retires: Field Marshal Sam Manekshaw retired from the board of Britannia Industries Ltd today. He was with the company for the past 12 years. He was also the chairman of the audit and remuneration committee.

However, Mr Manekshaw would continue as a Director Emeritus on the board. On this account, a resolution was passed at the meeting and it was decided that no one would be appointed in his place.

Our Mumbai Bureau reports: Britannia Industries reported a drop in its net profit at Rs 39.1 crore for the quarter ended June 30, 2005 as compared to Rs 60 crore for the corresponding period of the previous year.

Total Income (net of excise) decreased to Rs 407.8 crore (Rs 434 crore).

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