By IANS,
Kolkata : Britannia Industries is planning one or two greenfield projects, Chairman Nusli Wadia said here Monday.
“We are looking at one or two greenfield projects in the coming days,” Wadia said, addressing the 91st annual general meeting of the company.
Asked about the location of the projects, Managing Director Vinita Bali said: “It is too premature to say the location. It will be finalized in the next few weeks.”
The company, however, did not specify in which segment in particular it would invest.
“Investment depends upon the location which should be close to the market, and also on the tax benefit that we can get for the project,” Wadia said.
Britannia makes buiscuits, bread, cakes and marine products. It is also engaged in dairy business with the launch of cheese, dairy whiteners and processed food products.
Talking about the company’s investment in the current fiscal (2010-11), Bali said: “Every year we invest around Rs.70-80 crore. This year also we will do the same.”
Britannia could raise biscuit prices between 5-10 percent depending on products to mitigate the impact of commodity price inflation.
Bali, however, said it could be difficult to go for a hike second time this year due to competitive nature of the industry. It has already increased price during the first quarter (April-June) of the current fiscal.
“While our volume growth has been 20 percent in April-June, value growth was 26 percent,” she said.
Wadia in his address to the shareholders said: “We are yet to overcome the impact of inflation push…hopefully we will pass on the impact of commodity inflation as biscuit industry is the only one which is yet to raise prices.”
Prices of key ingredients for biscuit like wheat, sugar and milk have gone up substantially.
“Britannia will focus more on differentiated products where there is less competition and we would be able to raise prices,” Bali said.
About the rent-hike dispute between the company and the Kolkata Port Trust regarding its Taratalla premises, Wadia said the company has adopted two-pronged strategy to resolve the matter. It has moved court and simultaneously it is trying to negotiate and settle the matter with the KoPT through dialogue.
Bali confirmed the factory operations are in full-swing in Taratala premises, in the southern outskirts of the city.
Regarding the company’s foreign operations, Wadia said: “The Middle East business continued to be adversely impacted by the challenging global economic uncertainty and a real population decline in the UAE, where it has a sizeable presence. Despite this, it revamped its marketing strategy and made significant brand investments that strengthened its competitive position, resulting in a market share increase in the GCC (Gulf Co-operation Council).”
“Operations in Sri Lanka were discontinued as they were not viable and Britannia will continue to export some of its differentiated brands in Sri Lanka.”
“We are entering into Saudi Arabia market,” Bali said.
The company declared its first quarter result Monday. It posted net profit of Rs.32.8 crore against Rs.47.3 crore posted during the corresponding period a year ago.