The Hindu Business Line : Britannia plans to set up contract manufacturing units

Britannia Industries Ltd (BIL) has firmed up a strategy to help set up new contract manufacturing units at least at 35 locations in the country in the next two to three years, contributing financial support to the extent between Rs 150 crore and Rs 175 crore. All locations and biscuit brands have been identified for contractor manufacturers, according to Ms Vinita Bali, BIL's Managing Director.

Talking to newspersons on the sidelines of BIL's 87th AGM venue here on Tuesday, Ms Bali said that the company, in addition to meeting a portion of investment for setting up the contract manufacturing units, would expand and renovate its own manufacturing facilities in Uttaranchal, Delhi, Chennai and Kolkata so as to ensure the company's organic growth. She said, "We are growing at 25 per cent growth in volume. This trend has to be maintained."

Earlier, addressing shareholders, the Chairman, Mr Nusli N. Wadia, said that the new thrust areas of the company in future would include diversifying the product portfolio to include food and snacks, either organically or through acquisitions in India. This apart, the company would also pursue growth through opportunities internationally, replicating the successful business available for mass consumption.

Stake in `Daily Bread'

Mr Wadia said that the company recently acquired a stake in Bangalore-based Daily Bread Pvt Ltd, a speciality manufacturer and retailer of premium quality bakery products. This acquisition marked Britannia's entry into the high-end freshly baked gourmet food. It was indicated that eight boutique shops of bread and cakes under Daily Bread would soon be operating in Mumbai. The same type of boutique shops would be open in other cities. Moreover, biscuits would be made available to consumers in small pouch packs.

The Chairman said that domestic biscuit market had become fiercely competitive due to fuel prices going up by 22 per cent, commodities such as sugar and wheat increasing by 12 per cent and 22 per cent, respectively. During this session, the price of wheat has increased from Rs 680 per quintal and to Rs 850 per quintal. Despiteall odds, the company could uphold its operating margin at 10.3 per cent and it could also maintain lead in six of the seven categories in the biscuit market.

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