Published On:August 16 2019
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Britannia eyes ₹200-crore capex to grow adjacencies business.

Britannia eyes ₹200-crore capex to grow adjacencies business.

Britannia Industries eyes fresh capex of ₹200 crore over a three-year-period to expand its ‘adjacencies’ portfolio. The capex will go mostly towards manufacturing.

After biscuits, which account for a majority of the company’s turnover, adjacencies is its second largest revenue-generating segment. Adjacencies include offerings like cakes, rusks, salty snacks, crème wafers and other non-biscuit offerings. Diary is the third largest operating vertical for the company.

Adjacencies is a ₹2,000-crore business for Britannia and accounts for 20 per cent of its ₹10,500-crore turnover .

According to Jayant Kapre, Head – Bread, Cake, Rusk and Adjacency Business, Britannia Industries has already “committed” an investment of ₹300 crore, and a major part of this has already been invested.

“Another ₹200 crore is expected to be made over the next three years, mostly into manufacturing,” he told BusinessLine without specifying the details.

Other categories

In the recently launched croissant category, where Britannia entered into a joint venture with Greek company Chipita, efforts are being made to “ramp up capacities” and get “to a national launch very quickly”.

Scale-up will happen in newer categories like salty snacks (mostly baked offerings) and cream wafers. Small value packs and regional flavours are also being looked at. The two categories put together have a run rate (annualised sales) of ₹100 crore.

“We believe there is headroom for growth. Snacking is a ₹25,000-crore market and even if we manage a one per cent market share there, it is ₹250-crore turnover,” Kapre said.

Britannia has launched its salty snacks primarily in South India. And as a conscious strategy has ensured that the product does not travel long distances. Thus, it is looking at small lines which will co-exist with the present lines of its other bakery products in various parts of the country. “This line (strategy) has given us great results in the South, and we are currently at about 75 per cent capacity utilisation. It will take us slightly over a year to make sure that we become a pan-India brand because the second line is going to come up in Ranjangaon (Maharashtra),” the company’s MD, Varun Berry, had said during an analyst concall.

HBL





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