The Hindu Business Line : Britannia plans Rs 150-cr expansion

"We plan to expand capacities in our existing facilities as well as look at greenfield projects," the Britannia Managing Director, Ms Vinita Bali, told Business Line. Ms Bali said the company is scouting for land at places such as Hyderabad, Asansol and Kolkata.

Last year, Britannia pumped in around Rs 60 crore as capital expenditure for expanding its sales network, into marketing and upgrading existing facilities.

Ms Bali said to sustain the company's growth rate of around 22-23 per cent, it was necessary to expand the capacity of the company. According to market analysts, the biscuit industry is growing at 10 per cent - 12 per cent per year.

The Uttaranchal plant, which produces around 370,000 tonnes of biscuits per year, will be the first plant where the capacity will be expanded. It will be followed by setting up new plants.

Different packaging

Ms Bali said that the company was also coming out with different types of packaging for its products. For example, its largest brand, Tiger had been launched with a new pack, costing a mere Re 1. "Our strategy is not to market all our products in all packs in every market," she said. Britannia had six "pillar'' brands, the sales of which contributed 75 per cent of the total turnover, she said.

Glucose is the only segment where Britannia's product does not lead the segment but is a close number two to its competitor. " Last year, we had more launches than any of our competitors," she said.

Rising costs

Ms Bali said that rise in input costs and value added tax on biscuits had in fact hit the industry hard. With VAT at 12.5 per cent, the total tax component on biscuits was as high as 25 per cent, she said. "If the government reduces taxes, the consumption will, in fact, go up," she said.

She said because of the shortage of wheat production globally, the wheat prices had gone up. Coupled with this, even sugar prices are going up. "Raw material costs have in fact been going up steadily," she said.

Ms Bali said that the company mighteventually increase its stake in Daily Bread in which it acquired less than 50 per cent stake earlier. Britannia last week acquired the stake from the promoters of Daily Bread.