Dry cell battery major Eveready is planning to form a joint ventue company within this fiscal with Universal Wellbeing, part of Indonesia's Wings Group, in order to scale up its FMCG business in India.
Dry cell battery major Eveready is planning to form a joint ventue company within this fiscal with Universal Wellbeing, part of Indonesia’s Wings Group, in order to scale up its FMCG business in India. The joint venture firm, yet to be named, is expected to be formed by the end of March, and should substantially be scaled up in five years, Eveready Industries India (EIIL) managing director Amritanshu Khaitan told FE. “…we write to inform you that the company has agreed to enter into a joint venture with Universal Wellbeing Pte. Ltd. to engage in the business of manufacturing/importing and marketing of fast moving consumer goods in India, through a joint venture company to be newly incorporated for the same,” EIIL said in a stock exchange filing on Wednesday. EIIL will acquire 30% stake in the joint venture company, while the remaining will be acquired by Universal Wellbeing, one of the leaders in the FMCG market in south-east Asia. The initial paid-up share capital of the JV firm is to be Rs 25 crore, according to the filing.
“The plan is basically to leverage their (Universal Wellbeing) products, their expertise, and use our distribution network and scale up our FMCG offerings to the Indian market,” Khaitan said. “We have a distribution network which goes into the millions of kirana stores. We want to leverage that. Now, when a person goes into a shop and we only offer him battery, torches and packet tea, I only get limited turnover from that shop,” he said, adding that the idea behind forming the JV was to expand bandwidth to carry more products. Eveready, which has been the industry frontrunner in the portable energy (dry battery and flashlight) segment, announced earlier this month that it will launch confectioneries. The confectionery line is to be called ‘Jollies’. The company has significant presence in the lighting market and also has product categories of home appliances and packet tea.
“The FMCG part of our business – the packet tea venture, the proposed joint-venture and the confectionary section – should add at least Rs 500-crore revenue in five years time,” Khaitan averred. On whether there will be any manufacturing unit under this proposed joint venture, he said, “These things will be decided once the JV is created. There will be separate management team of the JV and they will analyse whether products to be sourced in India from Indonesia or to be manufactured.” “We have not yet decided that what products to be launched in India,” Khaitan said. Universal Wellbeing manufactures and markets household, personal care and food products. On Wednesday, Eveready’s scrip fell by 1.57% to end at Rs 432.85 on the BSE. The deal with the Indonesian company was announced during market hours.