MTR Foods announced on Tuesday that the brand, which was acquired by the Norwegian conglomerate Orkla in 2007, plans to double its turnover to Rs. 500 crore by 2012. Paul Jordahl, Chairman and CEO, Orkla Brands International, said, “We aim to treble profits in that timeframe.”
The company also announced a relaunch of its packaged food brand, reflecting “the brand's new look but which remains at its core authentically Indian,” Mr. Jordahl said.
Orkla, which had revenues of over $9 billion in 2009, plans to make the MTR brand achieve a compounded annual growth rate of 20 per cent in the next few years. Mr. Jordahl said Orkla was open to fresh acquisitions “if they are interesting.” Depending on the nature of the planned acquisitions Orkla would decide whether fresh acquisitions would be within the MTR umbrella or outside it.
Sanjay Sharma, CEO, MTR Foods, said MTR's margins have been adversely affected by the sharp increase in the price of raw materials in the last couple of years. Raw material prices, he said, had increased by an average of 9 per cent in 2009 and by about 7 per cent in 2008. “We were affected by the sudden acceleration in prices,” he said. “Our profitability has been under pressure, as a result,' he added. The company has a “pricing and efficiency programme to deal with this,” Mr. Sharma said.
Mr. Sharma said the company had decided to convert MTR from a regional to a national brand. In order to provide “better focus”, it has decided to restrict the brand's presence to 150 towns and cities in the Northern, Western and Eastern regions from 500 towns at present. The company has also decided to double its media spend in the current year.
