Buoyed by global Gujaratis, Balaji Wafers mulls exports

For the Virani brothers of Rajkot, who entered the refreshment business selling snacks at a local cinema house, three decades is all it has taken to make their 'Balaji Wafers' a dominant snack product in Gujarat.

Such is its hold over the refreshment markets that a large chunk of non-resident Gujaratis (NRGs) from the US and UK have begun asking their local distributors to import the Balaji range of products once they go back to their respective countries.

Although Balaji has always insisted that it wants to cater to the growing domestic market, the phenomenal demand from distributors abroad is making it re-think the strategy.

Keyur Virani, technical director of the company, admits that while exports was not on the cards so far, the commissioning of a new plant at Valsad in Gujarat with a capacity of manufacturing 2.2 tonnes per hour means that the company could think of earmarking close to 20 per cent of its produce for exports.

"We have received plenty of NRG interest from the US, UK and Dubai and will look towards that direction after February 2008, when the first wafer manufacturing line will start operations," said Virani. So far, Rs 30 crore has been invested in the Valsad plant and a further Rs 40 crore would be invested by next year.

Pricing has always been kept at Rs 5 and Rs 10 or a little above for the products, which is at least 15-20 per cent less in bulk sales as compared with its nearest competitors and Virani says the competitive pricing strategy would be extended for its exports as well.

The market size for snacks in India is estimated to be close to Rs 4,000 of which Balaji Wafers claims to be worth around Rs 200 crore.

Although more than 70 per cent of its sales still comes from Gujarat, the company is working on establishing a pan-India presence starting with Maharashtra and Rajasthan and the southern states.

Officials of the company admit that bigger brands including a top-selling cola brand have been in touch with them informally regarding picking up stake or even a possible acquisition in the near future but the company has no plans to take up either of the options as of now.