The liquor sector, unlike other sectors, is not witnessing a slowdown, insulated as it is from the current economic crisis. In the latest example of this, Kishore Chhabria-promoted Allied Blenders & Distilleries Pvt Ltd (ABD) is on the verge of acquiring a distillery in the western part of Maharashtra for about Rs 100 crore. ABD is in final stages of negotiations and the deal is expected to be closed by this month.
The acquisition of the distillery, which has a capacity of 100 kilolitres per day, is expected to help ABD strengthen its presence in North Indian markets.
Confirming the development, Deepak Roy, executive vice chairman and CEO, ABD said, “We are in the final stages of negotiations and hope to close the deal by this month.” However, he refused to disclose financial details.
As part of boosting its presence in the eastern part of the country, ABD has already chalked out plans to set up a greenfield facility in Haldia, Kolkata, at an estimated cost of Rs 120 crore. It will have a capacity of 100 kilolitres/day.
By virtue of owning the two facilities, the company can reduce expenses incurred while buying spirits from various states, he added. Currently, it imports spirits from states like Punjab and UP. Once it stops buying spirits, the company could hike its profits by Rs 25-30 per case.
ABD’s flagship brand, Officer’s Choice whisky, has witnessed sales growth of 44% compared to last year. The company, which sold 6.6 million cases of Officer’s Choice last year, is expected to sell about 9.4 million cases by March 2009. Officer’s Choice is the second largest selling brand in the regular whisky segment following United Spirits’ Bagpiper, which sells about 14 million cases.
The company expects to achieve the target of 25,000 cases for Wodka Gorbatschow, the German vodka brand, which had been added to its portfolio following a 50:50 joint venture with Henkell & Sohnlein of Germany in four markets.