Amway choses Guj over TN for its new plant

Direct selling FMCG (fast moving consumer goods) company Amway India has finalised Sanand to set up its first company-owned manufacturing plant in the country, state government sources here confirmed. The investment would be to the tune of Rs 400 crore.

Amway India currently has a vendor plant in Baddi in Himachal Pradesh. The company has recently tripled the production capacity at the contract manufacturing plant at Baddi by adding four new production lines. The US-headquartered FMCG firm had earlier zeroed in on Tamil Nadu and Gujarat to set up its first manufacturing plant and has finally chosen Gujarat over the southern state.

Achinta Banerjie, vice-president, west region, Amway India did not wish to comment on the location of the upcoming plant. Sources in the state industries department, however, confirmed the development and said that the company had earlier sought for land from the Gujarat government, but things did not fall in place then.

"They had asked for around 30-40 acres of land at the Gujarat Industrial Development Corporation (GIDC) cluster at Sanand last year, and land was allotted accordingly. However, the company failed to make payment on the last day, owing to some pending clearance from their headquarters", said the official. Following this, the company had asked for an extension from the GIDC, which was granted. "Amway, indeed, is coming up with a plant at Sanand now. Everything has been finalised", the source added.

The company is likely to shell out Rs 40 crore for the land parcel of around 35 acres.

Amway has clocked a growth rate of close to 27 per cent in Gujarat at Rs 85 crore in 2011 (the company follows a January to December fiscal). This is better than its national growth rate.The company touched a turnover of Rs 2130 crore in 2011, up 19 per cent from Rs 1790 crore of 2010.

"In Gujarat we have recently opened operations in Anand, Valsad & Godhra. A Brand Center was instituted at the Surat office in the end of 2011. Gujarat has close to 50,000 active Amway business owners", said Banerjie. Commenting on the production capacity of the upcoming plant, Banerjie said that it would be aligned to meet the company's growth strategy for the next ten years. The company plans to touch revenue figures of Rs 2500 crore during the current fiscal.

Currently, nearly 60 per cent of the company's business in India comes from the sales of its flagship brand, Nutrilite.