Fast-moving consumer goods major Hindustan Lever Ltd (HLL) has drawn up plans to launch biscuits through Modern Foods Industries Ltd. A top company executive said the company plans to market the biscuits under the Modern brandname. He added that the product will be on the shelves this year.
The company has commissioned a consultant to study the viability of Modern's beverage brand Rasika, which has been out of the market since 1999. The valuation of the brand and the existing bottling plant near Delhi is in the process.
However, the chances of reviving the brand are slim as HLL plans to make bread and biscuits as its core businesses at Modern Foods, the executive said.
He said, "Currently, the company is in process of making Modern's bread business a success. And now it is also planning to launch biscuits through Modern Foods." According to him, HLL was also looking at acquiring a couple of companies or brands to grow the biscuits business. "The acquisitions would be linked to the foods business," he said.
Modern Foods also plans to centralise wheat procurement and make Modern an integrated wheat products business across the country. The company has already improved its sales of the bread business. In Delhi, the company is selling around one lakh standard loaf per day.
"We are already the market leaders in the southern and eastern parts of the country. Now, we are focusing on the western and the northern markets," the executive said.
Modern's bread sales in the fiscal 2000-01, the first year under the HLL management, increased to Rs 102 crore compared with Rs 78 crore in fiscal 1999-2000. Growth in the bread sales in the first four months of 2001 was 80 per cent.
HLL has invested Rs 3.5 crore in modernisation and buying of new equipment and will continue to make further necessary investments. The executive said low productivity in Modern Foods was due to outdated technology, non-functional and loss-making units, low labour-productivity and a lack of customer confidence.
