Radico to set up Uttaranchal unit

Liquor maker Radico Khaitan Ltd. has commissioned a greenfield manufacturing facility with a capacity of 600,000 cases per annum in Uttaranchal to derive the benefits of excise duty holiday.

"Work on the plant in Kashipur will commence next week and it will give us significant capacity to consolidate our marketshare in the northern region," said Abhishek Khaitan, managing director, Radico Khaitan. Work is already in progress on a similar plant in Rajasthan.

The company's board also approved the mergers of Whytehall India Limited and Anab-e-Shahi Distilleries based in Andhra Pradesh for a total sum of nearly Rs 42 crore.

Radico had bought out Bacardi International's 51 per cent stake in its joint venture in Whytehall. Radico paid Bacardi nearly Rs 6.12 crore for its 51 per cent stake and invested a further Rs 26 crore in Whytehall as fresh working capital.

"Last year, Whytehall had sales of 500,000 cases in the premium whisky segment, and the merger will further strengthen our topline growth," Khaitan said.

Anab-e-Shahi, which has a capacity of a million cases a year, will give the company a foothold in the southern markets where its presence is minor.

"In the first year of our foray into the south, we have sold around 800,000 cases of the Old Admiral brandy, and already Anab-e-Shahi is running at full capacity," he added.

In its Q1 results announced on Friday, Radico posted a 56 per cent increase in net profit at Rs 8.5 crore compared to Rs 5.44 crore in the corresponding period last year.

With new brand launches like 8 PM Bermuda Rum and Magic Moments Gin, the company's turnover grew 11 per cent to Rs 215 crore during Q1 ended June 30, 2004.

"The growth in net profit is a result of increased operational efficiencies and our acquisition strategy. With adequate capacity added, we will launch a few more white spirit brands, which is one of the fastest growing categories," Khaitan said.

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On a high

• Radico's manufacturing facility will have a capacity of 600,000 cases per annum and will derive the benefits of excise duty holiday.
• Work on the plant in Kashipur will commence next week and is poised to consolidate the company's marketshare in the northern region
• The 56% growth in Radico's Q1 net profit is a result of increased operational efficiencies and acquisition strategy