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United Spirits to invest Rs 100 crore in capacity expansion over 3 years

TE Narasimhan  |  Chennai 

United Spirits, part of Vijay Mallya’s UB Group, is planning to enhance its production capacity with an investment of Rs 100 crore.

The proposed expansion is to support the company’s export foray and to increase market share to 40 per cent in the domestic market. As part of the domestic expansion, the company is planning to target cites in the country.

Speaking to Business Standard after launching Four Seasons Wine here, Abhay Kewadkar, business head (wines) and director, Four Seasons Ltd, said the current production capacity is a million bottles, which will be increased to one million cases (each of 12 bottles) with an investment of Rs 100 crore over the next three years.

Kewadkar said from October the company will start exporting to he UK, France, Germany, Japan and some parts of the US.

Meanwhile, the company has set a target to capture 30 per cent of the wine market in India over the next three years. Currently, it market share is around 8 per cent. According to Kewadkar, the wine market is expected to double to Rs 800 crore over the next three years. The overall wine market in India is around 1.5 million cases a year. Currently, the consumer base in India for wine is very small, being less than 1 per cent of the total. Globally, it is about 30 per cent. Therefore, the growth potential is immense.

To increase the market share, the company would focus on creating awareness, customer education and accessibility, three bottlenecks which have restricted growth of the wine business in the country, he added.

The company is also planning to launch two labels this month and another two in October.

The company is planning to target cities, especially industrial clusters, for growth in the domestic market, said Kewadkar. Cities in the company's radar include Coimbatore, Pune, Mysore, Goa, Nagpur, Chandigarh and some more in Punjab and Haryana

“We are taking wine to all these cities where the wine industry hasn't really concentrated on and we see a big potential there,” he said.

First Published: Mon, September 07 2009. 01:49 IST