To include branded products in portfolio, cut down markets
“Listing is always an option but I don’t think we want to even think about it now.” – Mr Ravi Nedungadi.
Bangalore, Feb. 4 UB Group is making key changes in the business model of its recently acquired Scottish company, Whyte & Mackay, while a listing of the company is not expected to happen soon.
The UB Group President and the Chief Financial Officer, Mr Ravi Nedungadi, told Business Line that the business model of Scotch maker, Whyte & Mackay, is being changed from that of being mostly a bulk supplier of Scotch to that of selling branded products.
Whyte & Mackay’s distilleries add about 1 million litres of raw Scotch every week.
The Indian parent of Whyte & Mackay has also decided to significantly reduce the number of markets the company was selling its products from about 40 to half a dozen. The focus henceforth will be more on the traditional markets of UK and the US as well as markets such as Taiwan, South Korea, China, and Russia.
“Previously, 80 per cent of the total volumes was bulk and not branded. Ideally we want to do 50 per cent branded with a time frame of three to four years,” Mr Nedungadi said.
He said the operations of the company since it was taken over by the UB Group has been satisfactory. He said for the period ending March 31, 2008, the EBITDA target for Whyte & Mackay has been set at about £50 million while the turnover of the company is expected to be about £140 million.
He said the bulk of the sale which usually happens in one or two big lots had already taken place as the sales peak during Christmas.
Mr Nedungadi said Whyte & Mackay products would be sold in the US as well as its home market of UK, Russia and some South East Asian countries like Taiwan, South Korea, and China “which typically have a very, very high salience of extremely expensive tastes and hence they can be sold in more mature products which is profitable to the company.”
Mr Nedungadi said the listing of the company may not happen immediately. “Listing is always an option but I don’t think we want to even think about it now … but (if we do) we certainly want to list it at a higher value than what we paid for,” he said.
The UB Group paid around £595 million to acquire Whyte & Mackay in May 2007.
He said there is no repayment due for another two years, nor are there any capex plans to expand the distilleries there immediately.