Mumbai, Feb 2: For Baskin Robbins, India is the flavour of the month amidst the Southeast-Asian meltdown. The UK-based multinational Allied Domecq Retailing, 40 per cent owner of the joint venture that runs the Indian Baskin Robbins ice cream business, reviewed their markets in the region and found that the Indian business, which has achieved a break-even in four years, deserves full future commitment.Baskin Robbins operates through a 40:60 joint venture between Allied Domecq Retailing and the Ravi Ghai Group company Maharashtra Dairy Products Manufacturing in India.
Following the Southeast-Asian turmoil, Allied Domecq decided to review operations across countries. Even though the multinational has decided to go slow in certain countries like Indonesia, Thailand and Malaysia, where sales had slumped, it has assured commitment to the Indian market.
The decision comes after taking into consideration the pace of progress made by the Indian venture since it set up shop here, says Allied Domecq RetailingInternational assistant country manager (India) Rajiv Varma.
The company has posted a sales turnover of over Rs 10 crore in 1998, as against Rs 7 crore in 1997. It had posted a net loss of Rs 50 lakh in 1996. By September 1998, Baskin Robbins turned around with an estimated profit of Rs 50 lakh.
The joint venture company has already announced plans to venture pump in more equity into the company for which it has already obtained the necessary clearances.
The investment will largely be made in expansions of stores in all of Metro towns and Mini-metro towns. Volumes are expected to be boosted through penetration into the A-class towns like Trichur, Manipal and Mehdipatnam, to name a few.
A planned increase in penetration from 40 cities to 65 by the end of this year will be backed by the opening of 8-10 stores every months. Baskin Robbins plans to open 200 stores by the end of 1999 and 300 stores by 2000.
"We are targeting a growth of 3-4 per cent every month," says Varma. The company is aiming at aturnover growth of 60 per cent this year on the back of a commendable volumes growth which has come mainly after the company undertook the strategic decision to bring down prices from Rs 31 per scoop to Rs 25 in mid-1997.
Volumes, says Varma, without giving the base figure, have witnessed a 74 per cent growth in 1998 over the previous year. During 1999, the company plans to achieve a growth of 60 per cent over last year. It has similar growth plans for the year 2000, he said.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.
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