Dabur expands fruit drink portfolio

FMCG major Dabur India today entered into the fruit-flavoured beverages segment, with aims to garner up to 5 per cent share in the estimated Rs 1,100- crore Indian fruit beverages market. The company today launched 'Real Burrst', in four flavours — mixed fruit, crispy apple, orange and mango — under its 'Real' brand which is the flagship of Dabur's fruit juice portfolio. "Dabur has been in the health and nutritious drink market under our Real and Activ brand. However, we are entering the non-fizzy fruit-flavoured beverage market under our 'Real Burrst' brand," Dabur India Marketing Head (Food Division) K K Chutani told reporters here. He said the company is looking at getting a market share of 4-5 per cent within the next three years in the Indian fruit-flavoured beverages market on the back of its new products. "However, our entire fruit drink business is around Rs 300 crore and is growing at a rate of 23 per cent. So we want to maintain it," he said. Dabur's 'Real Burrst' will take on the likes of 'Maaza' and 'Frooti', the major players in the fruit-flavoured beverages market in the country.

Source: Business Standard

Danone Group wants to invest Rs 350cr over 5 years

The Danone Group has told the Foreign Investment Promotion Board (FIPB) that it proposes to invest Rs 300-350 crore over the next five years. It will invest in medical and nutrition sectors in India directly or indirectly via joint ventures (JVs). The group will further invest in baby food, dairy and beverages, it said. It has received a no objection certificate (NOC) from Britannia as well as from Avasthagen and Yakult joint ventures. The Danone Group currently holds 4.21% indirect stake in Avasthagen and has a 50:50 Indian JV with Yakult, Japan. It has sold its stake in Britannia to the Wadias this month.

Source: Moneycontrol

Britannia Ind to buy Fonterra's stake in NZ JV

Britannia Industries Ltd has informed BSE that the company has entered into an agreement dated April 28, 2009 with Fonterra Brands (Mauritius Holding) Ltd, Mauritius, for acquiring the latter's 49% Equity and Preference shareholding in Britannia New Zealand Foods Pvt Ltd (BNZF), their joint venture company engaged in Dairy business. This acquisition is subject to Reserve Bank of India approval. With this acquisition, Britannia along with its wholly owned subsidiary will hold the entire equity and preference capital of BNZF.

Source: Business Line

Marico scouts for buys in domestic market

As part of its inorganic growth strategy, FMCG major Marico Ltd is aggressively scouting for acquisitions in domestic markets. The company is planning to acquire two regional brands in the beauty & wellness sector in India. Currently, the company is in talks with two players based in southern states in this space, informed industry sources. Incidentally, Marico has decided to divest its entire stake in its wholly owned subsidiary Sundari LLC which is engaged in the manufacturing and marketing of skincare cosmetics in the USA. According to industry analysts, Marico will be investing in domestic acquisitions after completing its formalities to divest stake in Sundari LLS. “Since the acquisition of ‘Manjal’ (herbal soap) in Kerala in 2006, Marico has been scouting for southern skin care brands for a while”, said an analyst based in Mumbai. In 2006, Marico had bought out Hindustan Lever Ltd's Nihar brand for a Rs 227 crore. In the same year, the company also acquired Fiancee (a hair care brand) from Egypt-based Ready Group.
When contacted, Chaitanya Deshpande, head of Mergers & Acquisitions (M&A), Marico declined to comment on Marico’s specific acquisition plans. “The company has identified inorganic growth as part of its corporate strategy and is open to considering acquisition opportunities. We can not comment on any specific opportunities,” he said. On the rationale behind Marico’s decision to divest in Sundari LLC, Deshpande said that a majority of Sundari’s revenue is generated from B2B sales to spas located within luxury resorts and hotels globally. “Sundari constituted only a small share of Marico’s revenue. Moreover, the US which is Sundari’s base, has not been a part of Marico’s focus geographies for growth, which has come increasingly from Asia and Africa. The divestment is thus a logical part of Marico’s global strategy,” he added. The Group posted a net profit of Rs 188.7 crore for the year ended March 31, 2009, 11.6 % higher than the Rs 169 crore net profit for the year ended March 31, 2008. The group’s total income rose by 25 % to Rs 2402.6 crore for the year, compared to Rs1914.5 crore for the previous year. Enthused by its performance in FY 09, Marico is planning an increase in its advertising and marketing spend in 2009-10

Source: Financial Express

Philip Morris, Modis settle Marlboro row

US tobacco giant Philip Morris and its Indian joint venture partner, the KK Modi group, have decided to settle their dispute over the sale of Marlboro cigarettes in India, in what is being seen as a tactical retreat by both companies keen on gaining market share. The board of Godfrey Phillips India (GPI), where the two firms own a 36% stake each, decided on Saturday to start negotiations with Philip Morris to market Marlboro through the GPI distribution network in India. The two companies had clashed in 2003 after Philip Morris bypassed its Indian partner and struck an arrangement with a local distributor to sell Marlboro in India. The US company had said at that time Marlboro, its iconic brand immortalised by the picture of a cigarette-toting cowboy, was too precious to be given to a company not controlled by it. The subsequent thaw and Saturday’s decision to bury the hatchet is being attributed to a serious deterioration in GPI’s competitive position and the ever increasing dominance of ITC, part owned by British American Tobacco, Philip Morris’ big global rival. India’s 96 billion sticks-a-year cigarette market is dominated by ITC with about 65% share. GPI’s Four Square, Jaisalmer are small players in the premium segment, which itself comprises 60% of the total market. KK Modi, chairman of the company, declined to comment on Saturday’s board decision, but a person close to the devlopment said the move is largely to combat ITC’s hegemony. “The standoff has not helped either GPI or Philip Morris’ plans in India. Marlboro will add to GPI’s portfolio a high-end brand with strong consumer pull which it always lacked. The board has been formally informed about discussions with Philip Morris, but this does not imply that a deal has been finalised,” said the person, requesting anonymity. GPI shares jumped 20% or Rs 166.25, to close at Rs 997.60 on BSE. In January last year, ET had first reported about early talks between GPI and Philip Morris to cut a marketing and distribution deal for Marlboro. Although an executive close to the development said that Marlboro will be imported and marketed in India, another person familiar with the matter said that Philip Morris International has already done due diligence on two GPI plants in Mumbai and Ghaziabad, suggesting that the deal may involve local manufacturing of Marlboro. While the government will not allow any expansion in production, the person said that GPI had idle capacity as cigarette production declined during FY09, with firms stopping production of non-filter cigarettes due to the high excise duty. Philip Morris is likely to invest in marketing, while GPI will be involved in manufacturing and distribution. In fact, GPI has been bolstering its distribution strength in the southern and eastern states, areas considered weak for the company. Philip Morris is likely to keep its 100% India arm, set up to import and distribute Marlboro, as a shell company that will hold the brand rights, people familiar with the situation said. Philip Morris was interested in acquiring its partner's stake in GPI, but Mr Modi has steadfastly refused its overtures for years. Besides, the government's refusal to countenance any increase in foreign holding in the tobacco industry also meant share buyout was not a straight-forward affair. The Union health ministry’s curbs on cigarettes (it banned smoking in public places last year) and Philip Morris’ realisation that it can’t do much on its own could also have contributed to the climbdown by the foreign firm. Cigarette advertsing is banned in India and the government doesn’t allow companies to increase capacities for manufacturing cigarettes. Japan tobacco has been trying to increase its stake in its Indian JV, but the government has still not cleared it. “Keeping in mind the numerous restrictions, it is best to utilise the current JV to push its brand in India. Afterall it is distribution that can lead to increased sales,” one industry official said. In 2003, Philip Morris Services India bypassed GPI and entered into an agreement with Barakat Foods & Tobacco (BFT) for the distribution of Marlboro cigarettes in India. The company directly imported the product, which was then distributed by BFT under a non-exclusive agreement. Also, smuggled cigarettes, especially the Marlboro brand, have been selling very well in India. According to industry estimates, of the 250 million cigarettes that come to India every year, Marlboro alone accounts for 100 million. Philip Morris has an India office, which is the subsidiary of Switzerland-based tobacco company Philip Morris International. Its global brand portfolio includes L&M, Parliament, Chesterfield, Bond Street, Philip Morris, Lark, Virginia Slims and Marlboro, none of which are marketed by GPI in India. Philip Morris Inc joined hands with the KK Modi Group in 1979.

Source: Economic Times

ISS Facility Services acquires Godrej HiCare

ISS Facility Services India Pvt. Ltd. (ISS) has announced acquisition of Godrej HiCare Ltd. (GHCL), a subsidiary of Godrej Industries. Godrej HiCare is the leading service provider for pest control services in India and its acquisition grants ISS access to an extensive network and franchise base built by the Godrej HiCare across 18 cities. With this acquisition, Godrej HiCare will become a wholly owned subsidiary of ISS and will be integrated into the ISS brand. Commenting on the acquisition, Mr. Jolly Kochery, Country Manager, ISS Facility Services India Pvt Ltd. said, “We are pleased to announce the acquisition of Godrej HiCare as it is a strategic fit to our existing service portfolio. This acquisition will not only help us to fortify our presence in the Facility Service industry but will also help realize our vision of becoming the number one player in this segment. Despite the economic downturn, we feel that the Godrej HiCare business model has great intrinsic strength and will help us achieve our strategic objectives. Our international standards, global best practices and excellence in service delivery will ensure that
we are well geared to meet the expectations of current and potential clients alike.” Speaking on the occasion, Mr. A Mahendran, Director, Godrej HiCare Limited, “We have used our entrepreneurial spirit and sound management practices to successfully build the Godrej HiCare business in a short span of time. However, as a group we feel that for the business to realize its optimal potential, it needs to be scaled up by a player who has in-depth understanding of the sector. We believe that ISS, with its successful track record and presence across 50 companies globally, is poised to take this business to new heights in India.” ISS is one of the world’s largest facility services provider and provides complete end-to-end solutions across cleaning and housekeeping, office support, catering, property and pest control services as well as integrated facility services.

Amway to invest nearly Rs 185 cr in India in 2-3 years

US-based direct selling FMCG firm Amway will invest nearly Rs 185 crore in India over the next 2-3 years to buy space for its headquarter in the National Capital Region, besides setting up branches in other places. "We are looking to buy our headquarter here (NCR). We have been looking for the last two years and that will be (in) an investment between Rs 100-Rs 150 crore," Amway India Managing Director and CEO William Pinckney told PTI.
The company was looking at an area with sizes varying between 30,000 sq ft and 50,000 sq ft in Delhi, Gurgaon and Noida, he added.
"Over the last year-and-half, we have talked to both real estate developers and private owners," Pinckney said without divulging the details of the developers.
Besides, Amway India is also planning to have up to eight new centres across various locations in the country.
"We will develop 5-8 new centres, about 8,000-10,000 sq ft each. It will require an investment of about Rs 2-4 crore per centre," Pinckney said.
The company presently has 127 offices and pick-up centres at many places, including Delhi, Mumbai, Chennai, Bangalore and Pune. It also has 55 warehouses, which are outsourced to service partners.
Direct selling is a practice of marketing or selling products without a fixed retail location. Amway sells products ranging from FMCG to healthcare supplements in India, of which about 95 per cent are locally manufactured.
The company is increasing its product portfolio in India as it aims to clock a turnover of Rs 2,500 crore by 2012-13 and add over 50,000 distributors annually.
Amway India, which has over 35 per cent market share in the Rs 3,500 crore Indian direct selling market, is a wholly-owned subsidiary of the US-based 8.2-billion-dollar Amway Corp. It entered India in 1995 and started its FMCG operations in 1998.

Britannia Says Danone To Sell 25.48 pct Stake

Indian biscuit maker Britannia Industries Ltd said France's Danone will sell its 25.48 percent indirect stake in the company to Leila Lands Ltd (Mauritius). The proposed deal was expected to go through on April 14 and price to be finalised later would not exceed 25 percent of price worked under India's takeover regulations, it said in a filing to the stock exchange.

Emami forms panel to restructure operations

FMCG company Emami today said it will restructure the operations of its two subsidiaries - Zandu Pharmaceutical Works and Emami Realty - and has formed a committee to evaluate various options for the same. "We have formed a committee to look into various options for realignment of activities of our two domestic subsidiaries," Emami Ltd Chief Financial Officer and President N Bhansali said "The committee would evaluate options, including merger, demerger or whether the realty business would continue as it was", he added.
In a meeting today, the board of directors of the company discussed various options for restructuring and reorganising FMCG and realty business carried on by Emami Ltd and subsidiaries -- Zandu Pharmaceutical Works and Emami Realty, Bhansali said.
"In the current recessionary time, there has been severe impact on the real estate business, so the review for getting optimum synergistic benefit was necessary," Bhansali said.
Asked if the company would sell its entire stake of the realty subsidiary, Bhansali added "Earlier the board had decided to sell the stake in the realty business, but it is not going to sell to any outsider. Everything will be cleared only after the committee submits its report."

EBRD,Tata Tea to acquire 51% stake in Russian company Grand (player in coffe and tea sector)

The consortium led by Tata Tea, acting through an overseas subsidiary, intends initially to hold 51% of the Grand business -- with Tata Tea and EBRD having an effective stake of 33.2% and 17.8%, respectively.

The EBRD and Tata Tea Ltd are joining forces for the joint acquisition of a controlling stake in the Russian branding, packaging and distribution company- Grand, a well known player in Russia’s coffee and tea sector. The consortium led by Tata Tea, acting through an overseas subsidiary, intends initially to hold 51% of the Grand business -- with Tata Tea and EBRD having an effective stake of 33.2% and 17.8%, respectively. The balance of 49% will remain with the founding promoters, led by Dr. Alexander E Borisov.

Established in 1994, Grand today is a major Russian branding, packaging and distribution company in the economy segment of the coffee and tea business in Russia. It is mainly focused on regions outside the big cities and areas like the Urals, Siberia and Southern Russia. The investment by the EBRD and Tata Tea will be used to fund a programme which includes, among others, the modernisation of Grand’s production facilities in order to increase quantity and quality of output. This will open the way for new market opportunities.

On top of providing fresh capital, Tata Tea will also bring its considerable expertise and know-how to Grand. Its parent company, Tata Group, is India’s largest conglomerate and one of the largest producers of coffee and tea in the world. Tata Group has no investments in the beverages sector in Russia so far, but sees strong growth potential on a market where coffee is becoming increasingly popular and tea is a national beverage. Gilles Mettetal, EBRD Director for Agribusiness, said “the EBRD is pleased to add its specific strengths to Tata’s in order to make this investment successful. We can see a very clear role for Tata on the Russian market where it will provide customers with a wider choice of tea and coffee products of the highest standards.” The acquisition is subject to the fulfillment of various conditions, including regulatory approvals. Subject to this, the deal is expected to be completed during the first half of 2009.

In the agribusiness sector alone, the EBRD has directly committed more than €5.0bn in over 330 projects across Central and Eastern Europe and the Commonwealth of Independent States since 1991.

Tata Tea forays into branded cold drink market

Tata Tea today announced its foray into the branded cold drink market with launch of its cold beverage T!ON. The product has been launched in three flavors-Mango Rush, Peach Punch and Apple Buzz and will be initially launched in Chennai, a press release said here today. "This is a defining moment in the history of Tata Tea as it symbolizes the transformative change taking place in the company," Tata Tea Executive Director Sangeeta Talwar said in the release. The 400 ml bottle has been competitively priced at Rs 22, the release said. The move is significant for Tate Tea, which has been steadily transforming itself from a company with primary focus on tea to a beverages company focusing on the wellness and health platform, the release said.
Tata Tea has operations in over 40 countries.

Helion Venture Invests Rs20 crores in YLG salon chain

Venture funds in India have been moving away from technology to consumer sector for sometime. In a latest example of this, Helion Venture Partners has invested Rs 20 crore in YLG, a chain of salons and spas. The funding will be used for expansion and promotions.
This is the first round of funding for YLG, which stands for You Look Great, a company set up in 2009 by ex-employees of Future Group. The founders include Rajiv Bopaiah, who was the Chief of the health and beauty division, and Rahul Bhalchandra, who was the head of Wellness business at Future Group.
The company already has six salons in Bangalore. It plans to take to 25 stores by the end of the year, and to 100 stores nationally by 2011. “Next year onwards, we plan to hit a new city every six months,” said Rahul Bhalchandra, co-founder, YLG.
He also added that since they have launched during the slowdown, the company has been able to get properties for the stores at realistic prices. “It would be profitable for us to expand faster during the recession as we would be able to secure more properties at lower prices,” Bhalchandra added.

The firm expects to break even for all its stores in the next 6-9 months and is looking at an anualised revenue of Rs 30 crore by the end of FY 2009-2010. The YLG team currently comprises of 150 people.

The other leading beauty salon chains include that of noted hair stylist Javed Habib, Ambika Pillai and Limelight of Cavinkare's C K Ranganathan. Asit Koticha of ASK Group has also invested in a salon business, in the Mumbai based franchisee of French salon Jean Claude Biguine (JCB) and VLCC, which has been funded by CLSA Private Equity and Indivision India Partners.