Anuradha Desai, Chairperson of Venkateshwara Hatcheries, tells BrandLine why the group bought the Blackburn Rovers and how football can help the Venky's brand..
Football is the No 1 game in Europe and the Far East. If we go with it, we can get global exposure, and capture international markets. This acquisition will give Venky's immediate recognition abroad.
Anuradha Desai, Chairperson of the Venkateshwara Hatcheries Group, is a diehard cricket fan, and follows the game closely, making it a point to watch at least the highlights of every single match. But she is convinced that football's gaining popularity amongst the 10-17-year-olds as the “game of the future”. That might explain the rationale behind the decision of Venkateshwara Hatcheries Pvt Ltd, the parent company of listed poultry major Venky's, to buy the English Premier League team of Blackburn Rovers. The final deal was completed on November 19. The time gap between the decision to scout for a football team and the deal actually being inked is less than three months. In a conversation with BrandLine, she explains the rationale and the highlights of the acquisition.
What is the connection between a chicken and chicken products company and football?
Our company is in the protein business and protein and sports go hand in hand. The NECC (National Egg Coordination Committee) sponsors the Mumbai Cricket Association, we (VH) just ended a two-year contract to sponsor tennis player Elena (Dementieva), and we are also associated with the Trinidad and Tobago Champions League cricket team.
Football is the number one game in Europe and the Far East. If we go with it, we can get global exposure, and capture international markets. This acquisition will give Venky's immediate recognition abroad.
In India also, it is picking up amongst the 10-17 year-olds and is the game of the future. I think, while it may never be like cricket which is a religion in India, five to ten years on, it will be very popular.
How do you propose to promote your business?
Through this acquisition, we can build the Venky's brand. This may be through opening Venky's Express outlets at the stadium and promoting our products. We may look at putting a small logo on the players' jerseys. We may consider renaming the home stadium of the Blackburn Rovers team Ewood Park - like the main sponsors of Arsenal renamed their stadium ‘Emirates' - our stadium could be called Venky's, or maybe something else.
We will also look at finding corporate sponsorships for the team from India. I have already got people showing interest in this.
Blackburn Rovers is one of the teams that has done well, has tradition and remained in the premier league for 90 years.
It is a well-known brand and I think the trust that ran it has not leveraged the brand …we can build it into a bigger brand. (As of now) we are not trying to be No 1 or something like that … if we are 8th or 10th we are happy.
Can you elaborate on the financials of the deal?
To facilitate the acquisition, VH set up a Venky's London, a new wholly-owned subsidiary. Money was transferred to it from the Group's internal accruals, and the value of the total buyout is £54 million. We paid £20 million for the shares of Blackburn Club. A sum of £10 million has been pumped into the club, and another £5 million will be given by the first week of December. Then we have taken over servicing of a debt of £16 million, while £1 million has to be paid to the Trust that owned the club for each of the next three years.
How will you get mileage from this acquisition within India?
We do have plans to bring in the new team for exhibition matches either with an international team or a friendly Indian team. We will also look at holding camps for players here … maybe even bring in the Blackburn coach to train them, and take players abroad for training. Our aim is to find an Indian footballer in the Blackburn Rovers team sometime in the future. If we can have a Sachin Tendulkar in India, why can't we find a David Beckham?
How big is your European business as of now?
Today our exports are mainly egg powder, medicines and vaccines and valued at Rs 150 crore. The major chunk of this is to Europe.
What is your share of the broiler/layer market in India? And how is the industry growing?
The size of the poultry industry in India is estimated to be Rs 52,000-crore broadly divided as 65 per cent coming from the broiler business and the remaining coming from eggs. The broiler industry is growing at 18-20 per cent annually while the egg industry is growing at 7-8 per cent.
Our business is largely selling one-day-old chicks.
In this part of the business, our market share through our own group's sales and through our franchisees is 70 per cent for broiler chicks and around 90 per cent for layer chicks.Related Stories:
Blackburn Rovers owners to egg Indian onto football team