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Britannia Industries is planning a ₹1,000-crore investment to set up a mega food park at Ranjangaon in Maharashtra.
The company will relocate its upcoming croissant-making facility from Tamil Nadu to the proposed integrated food-park (in Maharashtra), while it ramps ups international business by exploring the setting up of own facilities at Nepal and in African markets.
“There has been a change in strategy (for the croissant-making facility). Instead of Tamil Nadu we are looking at Maharashtra now where we are setting up food park,” Varun Berry, Managing Director, Britannia, told BusinessLine , adding that fiscal “incentives” was the reason for this change in strategy.
Berry was in Kolkata for the company’s 98th Annual General Meeting.
Britannia had entered into a joint venture with Chipita SA, a Greek company for manufacture and sale of croissants.
Meanwhile, investments in the green-field project at Ranjangaon are expected across four to five phases. Work will begin this year.
The facility will include multiple biscuit-making lines, one cake making line and a croissant one to start with. At a later stage, it will include rusk lines, an integrated dairy back-end facility and even a flour-mill if it is feasible.
“We have applied to the Maharashtra government for additional and adjoining land of 48 acres, apart from the 96 acres we bought,” he said.
Britannia’s present biscuit making capacity stands at 1.1 million tonnes, annually.
Market sources indicate that the plan to add new capacities is a part of the company’s strategy to focus on more in-house offerings as compared to third party/outsourced ones. Right now, the in-house to outsourced offerings ratio stand at 55:45.
According to Berry, around ₹400 crore will go as investments this fiscal which include the upcoming dairy plant, part of the Ranjangaon facility and two more facilities – one each at Guwahati (Assam) and Mundra (Gujarat). The Mundra facility will cater to exports.
New markets Britannia currently exports to 70-od countries with international business accounting for ₹700 crore.
According to a recent Edelweiss report, growth in Britannia’s international business continued to be under pressure due to deteriorating geopolitical situation and currency fluctuations.
The West Asian countries continue to be a key export market for the company.
“Growth in the international business should be 1.5 times the growth in India,” the MD said.
“The strategy of our company is to enter into one new market every year,” Berry said.
Post Nepal, the company will explore the possibility of entering the recently opened-up Myanmar market and the African nations.
“We cannot put up a facility everywhere. So having a hub-and-spoke model and setting up facilities in countries that have free trade pacts will help,” Berry said.
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