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Expecting to grow at 40 per cent this year, Vadilal Industries Ltd (VIL), India's second largest ice-cream maker after Amul, has increased its production capacity from 2.25 lakh litres a day to 3.25 lakh litres. VIL has invested Rs 40 crore on expansion-cum-modernisation plans at each of its two manufacturing plants in Pundhara, Gandhinagar district (Gujarat) and Bareilly (Uttar Pradesh) to ramp up capacities.
The BSE-listed company raised funds for this through internal accruals and borrowings, Mr Rajesh Gandhi and Mr Devanshu Gandhi, both Managing Directors, said here. The 80-year-old company has also set up India's fastest cone-making machine whose capacity is 18,000 cones an hour, as against 6,000 in the case of the existing machines. Since 60 per cent of sales come from cups, cones and candies, Vadilal plans to increase its share in the organised market from the current 20 per cent to 24 per cent by focusing on these as also small-value packs which are new growth drivers.
Its candy-making capacity — 15 lakh pieces a day — is the largest in India. With a view to achieve a growth of 40 per cent, as against the industry's 15 per cent, Vadilal is increasing its ad-spend by 40 per cent, with a focus on the electronic media. While the Chinese ice cream market size is around Rs 20,000 crore per annum, India's is only Rs 2,500 crore, of which, the organised sector market is estimated at Rs 1,500 crore.
Problems such as weak cold chains, logistics and reach to the rural areas are hampering the growth of this industry, the Gandhis added. At present, Vadilal has the largest range of ice creams in India with 150-plus flavours sold in a variety of more than 250 packs and forms. The range includes cones, candies, bars, ice-lollies, small and big
cups, family packs and economy packs.
Turnover
VIL, whose turnover in 2010-11 was around Rs 270 crore with a PAT of Rs 10 crore, is increasing the network of retailers from the current 50,000 to 70,000 across India. At present, it procures 70,000 litres of milk a day and is planning a backward integration to increase it in the near future.
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