With its Rs 80-crore expansion-cum-modernisation plans completed, Vadilal Industries Ltd, India's second largest ice-cream maker after Amul, is all set to increase its production capacity from the existing 2.25 lakh litres per day to 3.25 lakh litres at its two manufacturing plants in Gujarat and Uttar Pradesh, from Friday.

The Rs 40-crore expansion at each of the plants — Pundhra in Gandhinagar district and Bareilly in Uttar Pradesh — has been carried out with internal accruals and borrowings, Mr Rajesh Gandhi and Mr Devanshu Gandhi, both Managing Directors, told presspersons here today.

The 80-year-old company has also set up India's fastest cone-making machine with a capacity of 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 per day, is the largest in India.

With a view to achieving a growth of 40 per cent, as against the industry's growth 15 per cent, Vadilal is increasing its ad-spend by 40 per cent, with a focus on 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, they added.

Currently, Vadilal has 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.

The BSE-listed company, 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. Currently, it procures 70,000 litres of milk per day and is planning for backward integration to increase it in the near future.

“The company's national ice-cream market share would have been even higher but for the fact that it does not operate in major consuming regions such as Maharashtra and the four southern states as these are covered by another faction of the Vadilal family,” the Gandhis said.

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