Allied Blenders and Distillers (ABD), a Kishore Chhabria-promoted company, has acquired a grain distillery Shasta Bio Fuels in Telangana for about ₹200 crore.

Deepak Roy, Executive Vice-Chairman, ABD, told BusinessLine : “We would be investing some more in buying another lot of distilleries, and putting up greenfield sites and bottling plants. We have outlined a capex for ABD of ₹1,000 crore over the next five years,” he said.

ABD had acquired two units, Wales Distillers in West Bengal some 15 months ago and Unokoti Distillers in Tripura about four months ago. The acquisition of Shasta Bio Fuels by the third largest domestic player, which has its flagship Officer’s Choice Whisky, includes a grain spirit distillery situated at Rangapur village, with a capacity of producing 160 kilolitres of alcohol a day.

“The Shasta plant needs some modernisation work. An additional investment of ₹50-100 crore would be done to upgrade the distillery. It does not have an adequate water treatment plant. We used to buy spirit from this unit, and knew that it was in financial stress,” Roy said.

He insisted that the acquisition had not come cheap and was no distress sale. “Given that there are lot of things missing from the plant, this cannot be considered a distress sale,” he said, adding that the company was in touch with the owners to buy out the plant for some time.

ABD would be introducing modern technology to improve efficiency of operation, ensure value-added by-products, “it is a fertiliser by-product and we need to put in an extra drier for that”, and an effluent treatment plant over the next 18 months.

Roy added that this was the first grain distillery of the company. “With this acquisition we will be extending our presence in Telangana. This acquisition is in line with ABD’s long-term strategy of backward integration for securing the supply of essential raw materials, and strengthening the firm's own production capabilities,” he pointed out in a statement.

Shasta Bio Fuels is situated on National Highway No 7, on the bank of River Krishna at a distance of about 150 km from the Hyderabad Airport. The distillery also has a captive power generation plant of 6.5 MW, which has some surplus power for exports to the State grid after meeting its own power needs.

ABD achieved sales of 32 million cases in FY15. Sales grew at an exponential rate of 29 per cent in FY15, while the Indian made foreign liquor (IMFL) industry grew by 3 per cent over the same period.

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