The Hindu Business Line : Godrej Hershey planning greenfield unit for chocolates

New Delhi, Dec. 3 Godrej Hershey Foods and Beverages Ltd (GHFBL), the joint venture company between the US-based chocolate major, Hershey, and Godrej Beverages and Foods Ltd, is likely to set up a greenfield facility in India soon, as a result of its expansion drive in the country.

Mr A. Mahendran, Director, GHFBL, said, “At GHFBL, we are already in categories such as tea, juices, confectioneries and edible oil. After the joint venture it is only natural that we start leveraging Hershey’s expertise and thereby foray into chocolates. For this, we are already studying options of setting up a manufacturing unit in India.” He, however, declined to comment on when the facility would come up and the investment it would entail.

GHFBL, which already has soya-based milk brand — Sofit — and a milk syrup, Hershey syrup, in its portfolio is looking at adding chocolate based milk drinks and a couple of brands from the Hershey global portfolio into India soon. It is also going to build up focus on its Nutrine brand of confectionaries with product launches supported by strong promotional activities.

Godrej formed GHFBL as a joint venture with Hershey earlier this year, with the US-based chocolate major holding 51 per cent stake after acquiring 40 per cent equity held by IL&FS. Godrej holds 43 per cent in the joint venture company.

Personal care biz

Mr Mahendran, who also heads Godrej Sara Lee Ltd, said that as far as the home care and personal care business was concerned, Sara Lee’s focus would be on developing its market leader hair gel brand, Brylcreem, into a full fledged hair setting brand, targeted at the youth.

“We will strongly focus on building the Brylcreem brand. In fact, we have already started developing on this plan with the recent launch of the gel-based variants of Brylcreem. This will be followed by several other product launches in the hair setting category”. He, however, said that product launches in the category will not include personal care products such as shampoos and hair oils.

Sara Lee will also strengthen focus on the rural market. As a part of this initiative, Mr Mahendran said the company is already developing several low-cost items that would be targeted directly at the rural consumer.

Eyeing acquisitions

Meanwhile, speaking on the sidelines of the ongoing India Economic Summit, Mr Adi Godrej, Chairman, Godrej Group, said that domestic companies should take advantage of the rising rupee. He said, “With the rupee rising, it is a good time to go and acquire companies overseas.” Godrej is looking at acquiring companies in the emerging markets such as Latin America, South Africa and China, he added. “The acquisition would be in the range of $500 million,” said Mr Godrej.

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