Tobacco to dairy products company DS Group has acquired a 50 per cent stake in a Swedish tobacco company Winnington AB.

According to Rajiv Kumar, Vice-Chairman, DS Group, the move is aimed at coming out with next generation tobacco products which are healthier and safer because of the processing quality.

“We are working on some interesting blends. Initially, these products are aimed at the European market. We may come up with new products in the future for the Indian market,” Kumar said in an interview with BusinessLine .

Branded spices The company, which started as a tobacco products company, has since diversified into spices (Catch brand), foods & beverages and dairy. Kumar said that he was aiming to grow the Group’s turnover to a billion dollar by the end of current financial year.

‘Catch’ as a brand, for example, has crossed a turnover of ₹400 crore this year, and by the end of FY14-15 it is expected to reach between ₹450 crore and ₹500 crore. “Earlier the market for branded spices was slow, however, now it is picking up at a fast pace. Even today, 70 per cent of the market is actually unbranded, but this is changing. The shift to branded spices is very fast, in fact, it is faster than the growth,” Kumar said.

However, more than 40 per cent of the DS Group’s revenue comes from its traditional business of chewing tobacco and mouth fresheners.

“The revenue coming from our traditional business is significant. To our total turnover of ₹4,800 crore, the mouth-fresheners business is contributing over ₹2,000 crore and another 25 per cent is being added by the tobacco business,” he added.

However, the Group is expecting faster growth in the new areas it has diversified into. For instance, the dairy business.

“The year we launched, from October to April the company did a business of ₹40 crore, the following year we did over ₹100 crore, and this year, we have a target of ₹300 crore. With spices it took us 5 years to cross the ₹300-crore mark,” said Kumar.

In order to gain efficiency and higher growth, Kumar is planning to hive off various businesses into smaller independent companies.

The spices division has already become an independent company from last year. The objective is also to bring strategic partners into specific businesses.

“We would get strategic partners on board if our business requires. But in case after two or three years we require, we cannot bring them all to Dharampal Satyapal Ltd. Therefore, having these smaller companies will help,” Kumar said.

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