Britannia plans to re-enter Lankan biscuits market
14 Aug 2014 - {{hitsCtrl.values.hits}}
Britannia Industries Ltd, the Indian biscuit giant, is looking at viable expansionary plans to enter the Sri Lankan and Bangladeshi markets, according to Indian media reports.
“We are planning to revisit the SAARC countries. Bangladesh has a very big population, their habits are close to us … some preliminary work has begun,” company’s Managing Director Varun Berry was quoted as saying.
He also expressed establishing a presence in Sri Lanka by elaborating on points made by Chairman Nusli Wadia at the company’s Annual General Meeting (AGM) on August 12.
This is not the first foray by Britannia into Sri Lanka, attempting to break through to the local market in 2008 under its subsidiary Britannia Lanka (Pvt.) Ltd, with little to no success.
Its Sri Lankan operations depended on the manufacturing facilities of Luckyland Biscuit Manufacturers and the distribution was carried out by J.L. Morrison. However, any future return to the island is not expected to create jobs or utilize the local supply chain.
Britannia, which in 2010 had outsourced 70 percent of its biscuit manufacturing, is now producing 50:50, and within the next three years is aiming to bring production further in house at a 60-70 percent rate.
“Reducing outsourcing cuts costs for us while bringing fresh products to the market,” Berry said
India is one of the largest biscuit manufacturers in the world, coming behind the United States and China, while Britannia is currently enjoying the second place market share in India, below Parle Products, which claims a 35 percent dominant stake in the country.
However, biscuit consumption in India is much lesser, compared to leaders in the South and Southeast Asian region such as Sri Lanka and Malaysia and it is especially difficult to enter the local market as Britannia experienced six years ago, due to the strong brands present here.
Britannia has an established market in the neighbouring Asian and especially the African regions, which still possesses potential, as revealed by Ceylon Biscuits Limited, which is gradually finding considerable success there.
Britannia, which makes biscuits, cakes and other bakery products, is also planning to launch a disruptive product before the end of this year, and is in the process of establishing a US $ 3.2 million innovation centre in Bangalore.
Britannia’s previous innovative venture, ‘The Daily Bread’ bakery chain, has made a loss of US $ 326,000 despite the sales worth US $ 32 million in the year 2013/14 and Wadia expressed a need to revisit the operations.
Meanwhile, the company’s first quarter recorded a 15 percent rise in operating profits, which fuelled a 27 percent rise in net profits, while offering 600 percent dividends for the shareholders for the year 2013/14.
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