Dharini Nagarajan

New Delhi, Jan. 4

DELHI NCR-based Surya Foods and Agro Ltd, manufacturers of Priyagold biscuits, has forayed into the juices segment. It has set up a state-of-the-art manufacturing facility in Greater Noida with an investment of Rs 25 crore. The plant has a capacity of producing 1.5 lakh litres of juice per day.

Branded `Freshgold', the one-litre juice in cartons is available in supermarkets and malls in and around Delhi for Rs 60. Speaking to

Business Line

, Mr B.P. Agarwal, Chairman, Surya Foods and Agro Ltd, said, "Though the juices are currently available only in the northern markets, we plan to launch it in the south by the next month. We are also working on a specific distribution network for the same."

The Rs 300-crore turnover company is also setting up a biscuit manufacturing plant in Uttaranchal to avail of the tax incentives.

"We are investing around Rs 20 crore on the plant with a capacity of 100 tonnes per day, which would be operational by December 2006," Mr Agarwal said.

The company has been keeping a low profile with regard to advertising and promotions after its not-so-good experience with the `Priyagold khaao or khelo' contest. According to Mr Agarwal, "The retailers did not give out the coupons to the end-consumers. Consequently, we had to withdraw the scheme from the market." However, he said that the company has earmarked around Rs 3 crore for promoting the juices. While tele-commercials have already begun on IndiaTV, the company is hopeful of running them on all other channels by the next fortnight.

It is also in the process of sprucing up its exports operations. Currently it exports its biscuits to countries such as Dubai and Nepal.

According to Mr Agarwal, "The high level of taxation in the domestic market, which is a major concern, is one of the reasons why we are looking to increase export volumes."

Explaining further, he pointed out that high input costs and taxes are affecting margins and profits. As fierce competition from other players is preventing the company from increasing prices, he said, "High taxes are even forcing manufacturing units to close down. In fact, we have already had to shut down two out of six company's plants."

While speaking on the company's performance, he said, "We face immense competition not just from competitors in organised retail but also from the unorganised market which holds almost 40 per cent of the market share and has the benefit of not being subject to any taxes." The government needs to look into the matter before the situation worsens, he added.

(This article was published in the Business Line print edition dated January 5, 2006)
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