Perfetti Plans Rs 30-cr Capital Expenditure For Expansion

New Delhi, Sept 28 | Updated: Sep 29 2004, 05:30am hrs
The Rs 400-crore Perfetti Van Melle India Ltd has firmed up plans to add five new confectionery product lines and also enhance its annual manufacturing capacity over next three months. The company is expected to make capital expenditure of Rs 30 crore in the year 2004 -- up from Rs 15 crore in the year 2004.

Speaking to FE, managing director Stefano Pelle said: "The fresh capex investment is meant partly to enhance capacities of some our existing confectionery lines and also towards creating 3-5 new product lines in next three months."

Mr Pelle added: "A part of our capex-funding will come from the parent (Italy-based Perfetti Van Melle S.p.A.) and the remaining from our domestic reserves."

The ten year-old Indian subsidiary is said to be making profits for the last five years.

Earlier company launched its first sugar-free chewing-gum product Happydent Protex. Priced at 50 paise for a single-piece pack and Rs 5 for six-piece pack, Happydent is positioned as a product that helps prevent tooth decay.

The concept of sugar-free confectionery, which accounts for around 70% of overall confectionery sales in western countries like Italy, is still new to the Indian market. But Perfetti expects other confectionery majors like Cadburys to enter the niche market.

With categories like chewing gum and breath-freshners driving growth, Perfetti hopes to secure a turnover growth of over 15% in the year 2004. The company secured a growth of over 20% in 2003. Perfetti is aiming to keep its selling costs within 25% of net sales.