The Rs 700-crore Dabur group has decided to hive off its food division as a wholly-owned subsidiary. It plans to get shareholders' approval for the move at the annual general meeting on Wednesday.

Dabur India's board has already ratified the move, which is part of the company's restructuring exercise. The restructuring is based on a report prepared by the consultancy firm, McKinsey & Co.

McKinsey has advised Dabur to make food the third pillar of Dabur brands, the other two being healthcare and family products. The 29-year-old Amit Burman, who is a member of the Burman family's fifth generation, is already in-charge of the foods division. "Food is going to be a major focus for group," said Burman.

Dabur Foods owns four brands, Real fruit juices, Hommade cooking pastes, Capsico sauces and Lemoneez lemonjuice. The foods division failed to meet its Rs 15-crore sales target for 1997-98, recording a turnover of less than half of this amount.

The division's manufacturing facilities will continue to belong to Dabur India and will not be transferred to the new subsidiary. The fruit juices are manufactured at Dabur's Nepal plant, while the pastes are made at the group's factories at Sahibadad.

Dabur Foods plans to meet the sales target this year. The company plans to launch a range of ethnic foods and culinary products this year. Besides, the company will explore the possibility of launching pickles and chutneys. It will also make an effort to increase the brand awareness in order to break-even in 1998-99.

The group plans to concentrate on the food business under the restructuring chalked out by McKinsey. Over the next three years, Dabur plans to spend close to Rs 60 crore on advertising alone in its foods business, besides an additional capital investment of Rs 20 crore in the segment.

Dabur India hasalready made rapid changes in its other interests in the food sector. It has sold its 60 per cent stake in Excelcia Foods, a joint-venture company between Dabur and Osem. The other joint-venture food company, Dabon International, with Bongrain of France is tapping the high-end cheese market.