Food company Britannia Industries Ltd. is keen to increase its international footprint and is exploring options on setting up units in Africa and Myanmar. It is already implementing its maiden greenfield project in Nepal.
“We are keen to increase our international business which now stands at ₹700 crores” BIL MD Varun Berry told The Hindu .
‘One new market a year’
He said that the company would choose a nation like Egypt, from where it would be easy to reach out to other countries. “Britannia is looking for new markets and will add one new market every year,” he said.
The company is investing ₹55 crore in the Nepal unit which was till now catered to by its units in Uttar Pradesh and Bihar. BIL is planning capital expenditure of ₹400 crore in 2017-18 on its units in the Mundhra Export Processing Zone and its Assam unit, among other areas.
This would dovetail into the ₹1,000 crore capital expenditure (over four years) in the mega food park in Ranjangaon in Maharashtra. This would be the biscuit major’s biggest unit.
To a question on BritChip Foods, its 60:40 venture with Greek firm Chipita SA, Mr. Berry said that BIL had changed its plans for setting up the unit in Tamil Nadu. It will now come up on plot adjacent to the mega food park project. Company officials said that better fiscal incentives available for the food park project in Maharashtra had led to that decision.
The food park will have units for making biscuits, cakes, croissant and rusk. It will also have an integrated dairy unit and a flour mill — a first for Britannia. “We are exploring the feasibility of this unit as the JV needs speciality flour,” he said.
GST impact
He said that the past year had been challenging with the demonetisation and the GST roll out creating hurdles for the company’s growth. BIL ended the first quarter with consolidated revenue growth of 6% to ₹2,301 crore and an operating profit growth of 2% to ₹295 crore. “GST created a short-term impact, but is expected to generate a positive momentum going forward,” Mr. Berry said.
At the company’s annual general meeting today, Chairman Nusli Wadia said that BIL will look to increasing its share of in-house production facility to 65% from the current 55% over a two-year period. BIL is also planning to consolidate its brands, he said.
