The Hindu Business Line : UB Group earmarks $1 b for overseas buys

The UB Group is keen on taking a "re-look" at its manufacturing activities as part of the group's plan to become a global leader in spirit business. The implementation of the plan is to be completed within the next seven years.

Speaking to newspersons on the sidelines of the 60th annual general meeting of Shaw Wallace & Company (SWC) here on Wednesday, the President & Chief Financial Officer of the UB Group, Mr Ravi Nedungadi, said, "We have an aggressive plan in the spirits business. In fact, $1 billion have been earmarked for overseas acquisition."

He indicated that the group was considering the possibility of acquiring a scotch whisky-making unit in Scotland. Similarly, it was on the lookout for vineyards in South Africa and Australia.

Premium brands

Though the UB Group will continue to maintain its position as regards the manufacture of beer and wine, he said, the thrust would be given to premium brand spirits. Available market reports suggest that the demand for premium brand spirit was increasing very fast among middle and upper middle class consumers.

In fact, the India Made Foreign Liquor market is highly segmented with cheap brands starting at Rs 80 per bottle and the super premium ones costing over Rs 550 per bottle.

Whisky contributes around 56 per cent by volume. The IMFL market has grown historically by 9 per cent by volume. It is estimated that IMFL will continue to experience robust volume growth at 12 per cent over the next 10 years. In this scenario, the UB-management thought it appropriate to maximise its investments for manufacturing value-added whisky and rum and other spirit brands.

Mr Nedungadi said that SWC was already a wholly owned subsidiary of the newly formed United Spirits Ltd through a merger. United Spirits controlled 75 per cent of the total equity share of SWC. But the UB Group's Chariman, Mr Vijay Mallya, favoured complete integration of Shaw Wallace and United Sprits. It is expected that the UB Group will be able to recommend this step in the near term.

He said the management had already applied to the Registrar of Companies' for approval of the shifting of SWC's registered office from Kolkata. However, there may be a change in the decision in view of the fact that ordinary shareholders were pleading against the shift following the improvement in West Bengal's economic prospects.

In fact, Mr Nedungadi said the UB Group was actively considering making fresh investments in the State in the form of a giant greenfield spirits manufacturing project, based on multi-ingredient food products.

Earlier, the AGM was chaired by a non-executive director of the company, Mr S.R.Gupte, in the absence of Mr Mallya. He said that the SWC brands had benefited from being part of the larger stable of United Spirits, using its substantial distribution network.

More Stories on : Overseas Investments | Breweries | Mergers & Acquisitions

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Gujarat State Petro steps up drilling at KG basin

Nagarjuna Constn bags new orders

TTK Healthcare sells gloves unit

Amara Raja to infuse Rs 90 cr into Tirupati unit

Bhagyanagar to develop IT park

UB Group earmarks $1 b for overseas buys

Dr Reddy's gets USFDA nod for Ondansetron

Apollo stops production at Premier Tyres unit

Panoramic to enter realty sector

LML to submit revamp plan to BIFR soon

ONGC exploring asset swap; in talks with Italy's ENI

CGH Earth to consolidate in South