Companies

Prataap Snacks to invest ₹105 crore under PLI scheme

Meenakshi Verma Ambwani | | Updated on: Jan 04, 2022

It is to strengthen the manufacturing footprint of the company

Prataap Snacks Ltd, which recently got the government’s nod for its proposal under the PLI scheme, will be investing about ₹105 crore to strengthen its manufacturing footprint. The snacks and namkeen maker got the approval for the PLI scheme for food processing under the ready-to-eat category

The company which is known for brands such as Yellow Diamond chips and Avadh namkeen, is also looking at an aggressive distribution expansion as well as sharper focus on bigger packs.

Amit Kumat, Managing Director & CEO, Prataap Snacks told BusinessLine , last week in an interaction, “We will be investing about ₹105 crore for manufacturing capacity expansion by March 2023 to avail benefits under the PLI scheme.”

The scheme will be implemented from FY 2021-22 till FY 2026-27 and the selected companies will be availing sales-based incentives.

Talking about the company’s retail expansion strategy, Kumat said that the company is looking to strengthen the retail presence of its products in the Northern region especially in Uttar Pradesh and Punjab.

“We are also strongly focusing on ramping up our direct distribution. Currently our direct reach is to about 80,000 outlets in the country and we aim to expand it to about about 250,000 outlets in the next few months,” he added.

In the pandemic times, the snacks company also rolled out the telecalling initiative for more efficient distribution network as well as for better coverage of territories leading to higher volumes.

The FMCG sector has been facing steep inflationary headwinds in the past few months due to rising costs of key raw materials.

“We have not hiked prices but we have focused on other strategies to counter inflationary pressures. Our focus on implementing the direct distribution model coupled with other cost optimisation measures have helped us improve margins,” he added.

The company has been compressing its distribution model by cutting down on the number of super stockists enabling savings through lower channel margins and freight optimisation.

With rising in-home consumption in pandemic times, the company is also focusing on ramping up its bigger packs portfolio. “We plan to reduce our dependence on the ₹ 5 price point, which contributes a big chunk to our sales. We will be focusing on rolling out bigger packs especially for our namkeens in the next 2-3 months,” he added.

Published on January 04, 2022

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