Amway, the US-based direct selling FMCG major, plans to make India its sourcing hub as its Asian business has surpassed the total turnover it witnessed in other parts of the world, a top company official said.
?We are planning to source products from India for our global operations,? said William S Pinckney, chief executive officer & managing director of Amway India Enterprises, a wholly owned subsidiary of $8.2-billion Amway Corporation. ?We may either set up our own manufacturing plant in India or would source products from our existing contract manufacturers there for our operations across the world,? Pinckney said.
So far, Amway India has not directly involved in manufacturing in India. Products sold by Amway India are manufactured within the country by third-party contract manufacturers. Currently, the company has manufacturing tie-ups with seven companies in India, including Sarvotham Care in Himachal Pradesh. Around 85% of Amway products sold in India are being manufactured at Sarvotham’s unit at Baddi in HP as per the specifications provided by Amway.
The proposal of sourcing products from India comes in the wake of its business turnover increasing in Asia compared with other parts of the world. Around 60% of the company’s global business comes from Asia, in which India clocked a turnover of Rs 1,128 crore in 2008, registering a year-on-year growth of 40%, Pinckney said. He, however, declined to divulge details on the investment earmarked to make India the company’s sourcing hub.
Pinckney said the company would also set up a sourcing office in Hong Kong to coordinate supply of products between its operations across the world, Asia in particular.
Currently, the company has more than 450 products across the world, but markets only 110 of them in India under the four categories including personal care, home care and nutrition. Buoyed by the growth of 40% during recession-hit 2008, Amway India has inked an agreement to triple its production capacities at its vendor plant at Baddi as it would also help Amway acheive the targeted turnover of Rs 2,500 crore by 2012. It is expected that the company would bring in more products to India if it make the country its sourcing hub in near future.