Britannia re-evaluates plans following newJV

Tarun Narayan in Mumbai

In the wake of the joint venture with the New Zealand-based Fontera Co-operative, biscuits major Britannia Industries Ltd is evaluating the possibility of launching new products.

Sunil Alagh, MD and CEO, Britannia Industries

The company is also evaluating new locations for setting up fresh milk business. This initiative comes in the wake of the company’s plans to trigger accelerated growth from the dairy business and reduce contribution from the biscuits category to 60 per cent of the company’s business.

Says Mr Sunil Alagh, managing director and CEO, Britannia Industries Ltd., “The joint venture with Fontera will seek to strengthen the marketshare that this business already enjoys, and at the same time expand presence into new products. New locations for the fresh milk business will also be evaluated.”

Along with the current initiative, the company will also be looking at roping in new parties for contract manufacturing of dairy products along with the existing Modern Dairy and Thacker Dairy from whom the company is outsourcing dairy products.

Adds Mr Alagh: “All our contract manufacturers have provided us quality products. We would propose to continue our sourcing arrangements with all the existing parties, and, over time, bring in new parties that will help us address new products and locations
so as to significantly expand the size of our business.”

The company had entered into a joint venture with New Zealand Dairy Board where Britannia and Fontera hold 49 per cent stake each while
two per cent stake will be held by a business associate. For the venture in India, Fontera will render the infrastructural back-up and Britannia will lend the marketing backbone to make the business a profitable proposition in the coming months.

The company has focussed on dairy business as the core area to enhance its bottomline in the prevailing downturn. Even during the downturn the company’s major chunk of growth arrived from the dairy business. “Even in slowdown a contribution of 35 per cent from the dairy business helped us effectively confront slowdown,” informs Mr Alagh.

Directing its strategy to fuel bottomline from the dairy business, Mr Alagh explains: “Alongwith cheese and dairy whitener in 1997 the range now includes pasteurised butter, pure ghee, chocolate and strawberry milk, cold coffee and sweet lassi (all in tetrapaks)”.

It also has a presence in fresh milk in Delhi, Chandigarh and Kolkata.