The Hindu Business Line : Sula Vineyards to invest Rs 80 crore in expansion

The Nashik-based Sula Vineyards plans to invest up to Rs 80 crore in the next five years to upscale its winery capacities, acquire quality planting material and firm up strategies to increase its market share, both domestic and international.

According to Mr Rajeev Samant, CEO, an investment of Rs 15 crore in already underway in the current fiscal. "The company has internal funds, will source funds from banks and financial institutions for the expansion," he told Business Line here.

Sula Vineyards, which inducted a private equity fund, GEM India Advisors , during 2005, with an investment of about Rs 15 crore for a minority stake, was not looking for any private equity investor as of now. "We are open to the idea of divesting about 5-10 per cent of our stake to a financial investor," Mr Samant said.

Pact with French nursery

The company recently signed an agreement with a French Government nursery, to source quality planting material for multiplication and spreading it in nurseries and among growers in Maharashtra. Land has been identified and the State Government has been approached in this regard.

The advantage derived from the agreement would be the availability of virus-free planting material. Growers would get the certified material. With the expected boom in the domestic wine market and growing area under vineyards, quality certification would be useful, he said.

On capacity expansion, Mr Samant said the company was spending Rs 10 crore on the acquisition of the winery from Pimpane and upgradation to 10 lakh litres per year. The installed capacity of 2 lakh litres will be increased to 6 lakh by January 2007 when it would be ready for commercial operation.

The third winery in Nashik, with a capacity of 1.8 million litres, is also complete. While the Indian wine market was growing at an average of 20-30 per cent, Sula had grown by 50 per cent in the first six months of the current fiscal, he said.

On competition in the market and global brands entry, Mr Samant said, "Sula has built a strong brand. We are not worried about international brands coming. We are constantly improving quality and offering competitive prices and range".

Apart from the premium Sula Vineyards label, the company also produces the popular Madera range of table wines.

From being Maharashtra-centric, the company is reaching out with an advisory role to the Punjab Government. Punjab plans to have its own experimental winery and we are actively involved with them, Mr Samant said.

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