Britannia to set aside ₹500 crore for a food manufacturing unit in Ranjangaon
Britannia Industries has assigned a capex of ₹500 crore this year for the setting up of a manufacturing base at Ranjangaon in Maharashtra.
With the intention of transforming itself from a biscuits to a foods company, it has set up a food park in Ranjangaon, in the milk producing belt, to make its cakes, rusks, croissants and engage in dairy processing, apart from its mainstay, biscuits.
“Biscuit is still 85 per cent of our turnover of ₹10,200 crore, but we intend adding other products in the macro-snacking category. This year our largest capex will be for our Ranjangaon plant at ₹500 crore, which will get raised to ₹1,000 crore,’’ said Varun Berry, Managing Director.
Segments like dairy, where Britannia has been trying to make a mark, will also get a fresh impetus through its new manufacturing facility.
“Dairy is not going to be easy like the rest of the products, but the facility at Ranjangaon should be able to manufacture dairy products in the next two years. Today, dairy contributes 5 per cent of the turnover, but we should be able to take it to 10 per cent in the next three years with a turnover of ₹800 crore,’’ he said.
Considering itself as the Number 2 player after Amul in the cheese category, Britannia has pegged its product at a premium to its competitors.
“Dairy is a large category but we have the ability to distribute and manufacture products like cheese and if we can also get into the back-end with milk processing, there is no reason why we cannot dominate the category,” he said.
Recently, MNCs such as Kraft Heinz and Danone have either exited or scaled down their dairy operations.
Meanwhile, despite being a market leader in biscuits, Britannia has catching up to do in the value segment, where it is pitted against Parle and its dominant brand of Parle G in the mass glucose segment.
“The heat is medium in terms of competitive intensity. But, we are nowhere close to Parle in volume shares, as they are way ahead of us,’’ he admitted.
Celebrating its centenary year as a corporate entity, Britannia’s challenge now is to expedite its transformation from a biscuits to a foods company. As Berry says: “The challenge is how we can spread our wings and get into new categories and be looked upon as a foods company in the next three years.’’