United Spirits acquires Tern Distilleries

As part of its plan to augment its primary distillation capacity over the next two to three years, Vijay Mallya’s United Spirits has acquired the entire share capital of Tern Distilleries (Tern), based in Andhra Pradesh, for Rs 13.42 crore.

Tern has its manufacturing facility at Thallapalem in Visakhapatnam district. It has a capacity of 40 Kl per day of primary distillation capacity.

USL, the country’s largest spirits company (and third in the world), currently owns two units in Andhra Pradesh, both in Hyderabad. It also has four other contracted facilities within the state.

Around 55 per cent of USL volumes are produced in its own facilities; the balance is through contracted manufacturers. Subject to government approvals, the company intends to increase capacity to 120 kl per day over the next two years.

“With sales volumes growing at around 14 per cent year on year, we are always looking to augment our capacities, for distillation and for manufacture of IMFL (India-Made Foreign Liquor). USL will capitalise on any opportunity that presents itself for such augmentation, either at its inhouse facilities or through outsourced contracts,” said P A Murali, CFO.

This acquisition comes nearly a year after USL acquired Balaji Distilleries in Tamil Nadu, with a capacity of 10 million cases (12 bottles to a case) per year.