Britannia Industries: plans to consolidate factories

Mumbai / IN. (bi) Britannia Industries Limited, member of the Indian Wadia Group and top biscuit maker on the subcontinent, is working on operational realignment aimed at streamlining the number of manufacturing locations as well as reworking its distribution strategy. This comes in the wake of Britannia´s non-biscuit businesses such as breads, rusks, cakes and dairy gaining in size. Last month, Britannia also announced the consolidation of its dairy business with itself after acquiring the 49 percent stake of joint venture partner Fonterra in the dairy business.

«Britannia´s bread, cake and rusk portfolio has quadrupled in the past four years with a run rate of about 400 INR crore right now. We will consolidate factories across our bakery products and realign operations wherever it makes sense», the company´s MD, Vinita Bali, told The Economic Times.

Britannia is looking at consolidating its manufacturing locations. For one, in the Middle-East, where Britannia functions through a joint venture with the Khimji Ramdas Group and Dubai-based Strategic Food International (SFIC), it will consolidate its two biscuit factories into one.

The company is replicating this move at the front end too by defining a singular distribution network for its Oman-based partner Al Sallan Food Industries as well as SFIC as they address the same market. «The realignment is being done to increase cost effectiveness, reduce complexity and to adopt a synergistic go-to-market strategy», Bali said. Britannia is yet to release its 2008-09 year-end results but the third quarter results suggest a growth rate of about 20 percent.

The company has also streamlined its marketing play into four key paths namely modern trade, general trade, rural markets and transit routes. According to Vinita Bali Britannia is also targeting personal consumption clusters such as BPOs, railway stations and factories and is seeing a significant uptake. This fourth channel is being projected as a 150-INR-crore business opportunity for the company, she told the newspaper (source).