Britannia to diversify food range

Company has developed a commodity buying strategy to control costs measures & sustain bottomline

Confectionery major Britannia Industries Ltd, a joint venture between Nusli Wadia group and Groupe Danone of France, is planning to diversify into other areas of foods from current product range of biscuit and cakes in order to become a complete food company, Britannia chairman Nusli Wadia told reporters after the 86th annual general meeting here today.

Britannia earlier had milk business which was sold to Britannia Newzealand Foods two years back.

The company has developed a commodity buying strategy to control costs measures and sustain bottomline growth in the face of rising input cost and declining consumer prices.

Wadia said the company was now looking into various new areas of foods like snacks and health drinks but had not yet finalised anything.

"The board will take a decision in this regard soon," he said.

According to Wadia, BIL will look for both organic and inorganic growth opportunities for venturing into new areas of foods.

However, he ruled out the possibility of reentering the milk business as it was now run by a subsidiary.

Entering fresh milk business was a mistake, he admitted.

Commenting on the commodity buying strategy, Wadia said the company would use the commodity exchanges as a mechanism for hedging.

"The company is heavily dependent on commodities like wheat and sugar. The hedging activity will help control costs. It is now implementing a commodity buying strategy for managing input cost," added Wadia.

According to him, the focus on cost control and supply chain management yielded savings of Rs 20.2 crore in 2004-05.

BIL has already appointed KPMG for supply chain management.

"KPMG is looking into 48 projects like efficient procurement of raw materials, manufacturing and distribution logistics etc," said Wadia.

The chief executive officer of Britannia, Vinita Bali, said the company was looking at new distribution channels like malls.

"The company is investing around 15-20 per cent of revenue from a brand into brand promotion," she said.

The company was also reorganising its structure from geography as the profit centres to brand as profit centres.

"Our company has six power brands in the portfolio each exceeding Rs 100 crore in annual sales," she added.

Manekshaw steps down
Field Marshal Sam Manekshaw, one of the hero's of 1971 Indo- Pak war, is stepping down from the board of Britannia Industries.

The eminent soldier served in the board of BIL for more than a decade.

The company is not filling up the vacancy caused by Manekshaw's departure immediately.

"He intimated to the company that he does not seek reappoinment. The company will not propose to fill up the vacancy in the forthcoming annual general meeting," an official said.