Despite slowdown, Britannia to embark on aggressive expansion abroad

Britannia is setting up a new facility in Bihar and is planning to set up a new facility in West Bengal or expand its older facility in Assam.

Published: 11th August 2019 08:26 AM  |   Last Updated: 11th August 2019 08:26 AM   |  A+A-

Britannia Industries chairman Nusli Wadia

Britannia Industries chairman Nusli Wadia (Photo | PTI)

Even as a slowdown in the Indian fast-moving consumer goods (FMCG) segment drives sales and profits down, Britannia Industries is eyeing rapid expansion in both domestic and overseas markets.

According to senior company officials, including chairman Nusli Wadia and managing director Varun Berry, a new plant in Bangladesh is likely to be the first step in this new phase of expansion and Britannia plans to expand into one new international market every year.

“We have already set up a plant in Nepal, and are seriously looking at Bangladesh and other South-East Asian countries. We are evaluating opportunities in Africa... and plan to step up our endeavour on the international side,” Wadia said at the Annual General Meeting (AGM) of the company on Friday. 

Berry, speaking to reporters after the event, added that the manufacturing unit in Bangladesh will likely to start operations in the fourth quarter of 2019-20 fiscal. Brittania already exports to over 70 countries and it “will focus on setting foot in one new geography every year,” Berry said.

Expansion amidst slowdown 

Britannia’s new foreign expansion plans have been announced alongside slowing sales in its primary market (India), especially in the northern states like Himachal Pradesh, Uttarakhand, Haryana, Rajasthan, Uttar Pradesh, Bihar, Madhya Pradesh and Chhattisgarh. However, the company has also increased its market share in all these states, and plans to set up new plants across the region. 

According to Berry, the company is looking to enhance its presence in the eastern and north-eastern markets by expanding its manufacturing units and driving deeper penetration of its distribution networks in state like Arunachal Pradesh. Britannia is setting up a new facility in Bihar and is planning to set up a new facility in West Bengal or expand its older facility in Assam. 

“We are setting up a second plant in Bihar, which should be commissioned in a year and a half... Next likely stop is Kharagpur, but it may take at least a year, if at all that location is final,”  Berry said, adding that the proposed facility in the east will make biscuits and “adjacent categories” and likely need a capital expenditure of around Rs 150 crore. 

Price hike planned

Rising raw material costs are also likely to see the company effect price hikes across certain select segments. “On average, there has been a 4 per cent general inflation in input cost... Milk prices have completely shot through the roof... We will undertake a 4-5 per cent hike across the portfolio this fiscal,” Berry said. 

During the first quarter of the fiscal year, Britannia’s raw material costs rose over 7 per cent compared to the same quarter of the previous year. The company also reported a 3.64 per cent on-year decline in consolidated net profit during the quarter. 

Stay up to date on all the latest Business news with The New Indian Express App. Download now
(Get the news that matters from New Indian Express on WhatsApp. Click this link and hit 'Click to Subscribe'. Follow the instructions after that.)
TAGS
Britannia

Comments

Disclaimer : We respect your thoughts and views! But we need to be judicious while moderating your comments. All the comments will be moderated by the newindianexpress.com editorial. Abstain from posting comments that are obscene, defamatory or inflammatory, and do not indulge in personal attacks. Try to avoid outside hyperlinks inside the comment. Help us delete comments that do not follow these guidelines.

The views expressed in comments published on newindianexpress.com are those of the comment writers alone. They do not represent the views or opinions of newindianexpress.com or its staff, nor do they represent the views or opinions of The New Indian Express Group, or any entity of, or affiliated with, The New Indian Express Group. newindianexpress.com reserves the right to take any or all comments down at any time.

flipboard facebook twitter whatsapp