Amrutanjan plans expansion of distribution network

Plans to ramp up direct distribution network from 240,000 outlets to 300,000

Pain management firm Amrutanjan Healthcare, which has of late entered into the fast moving consumer goods (FMCG) business, is planning an expansion of its direct distribution network in tune with its long-term growth plans. The 124-year old company is looking at augmenting its direct distribution network from 2,40,000 outlets currrently to 3,00,000 by the end of FY18.

The company, whose overall reach extends to one million direct and indirect outlets, has set a target to grow the distribution network aiming at future growth, said its management in the firm's 2016-17 annual report. The goal is to increase the direct distribution network in each category, channel and geography.

Amrutanjan is also expanding presence in modern format sales, which contributed to around six per cent of the total revenue in FY17. Modern trade sales have grown 29 per cent during the fiscal year 2016-17 to Rs 14.68 crore as compared to 11.40 crore during the previous year. The company has seen a 20.11 per cent growth in turnover during 2016-17 with total gross sales of Rs 230.51 crore as against Rs 191.92 crore a year ago.

"Our focus is to scale up the brands that were recently launched. To do this, we need to improve distribution and continuously increase brand investments. We are also increasing investments in information technology deployment in the company, to increase data availability for better managerial decision making," said S Sambhu Prasad, chairman and managing director of Amrutanjan Healthcare Ltd.

Commenting on the growth in financial year 2016-17, he said, "This is a strong performance considering the adverse impact of the note ban (demonetisation) and the political volatility in Tamil Nadu which remained throughout the second half of the year, the large selling period for the OTC (Over-The-Counter) business". OTC business revenue was up 16 per cent from Rs 170 crore to Rs 198 crore during the fiscal, while the beverage business, which is comparatively new to the company, grew 30 per cent from Rs 22 crore to Rs 29 crore.

Amrutanjan, which has been focusing on pain management products and the pharma business, has in the recent past entered the fruit juice, sanitary napkin, electrolyte replacement and rehydration categories.

The plans are also to expand the product portfolio in the health care segment, said Prasad.