Amway India to invest additional Rs 150 crore in TN

Investment to be an add-on to the earlier planned Rs 400 crore

Direct selling company Amway India Enterprises Pvt. Ltd, a subsidiary of US-based Amway Corporation, has decided to increase its investment commitment in Tamil Nadu by another Rs 150 crore from the earlier planned Rs 400 crore. The company, which is expecting around 15-20% growth in India, is also planned to open new Amway Beauty stores across major metros.

 

Anshu Budhraja, chief financial officer, Amway said that the company was originally planning to invest around Rs 400 crore to set up a facility in Tamil Nadu and now it decided to increase it to Rs 550 crore, to manufacture more products and more lines. In 2012, the company signed a memorandum of understanding with the Tami Nadu Government to set up the facility, which will spread over in 49.4 acre land, in Southern part of the State.

 

The company is in the process of setting up the new facility, with nine production lines, for Nutrition, Cosmetics and Oral Care products. 

 

Commercial production of the plant is expected to start by 2015, said Budhraja, who was in Chennai to launch company's first Beauty store, which will sell health and beauty products.

 

The new stores, which will run by the company, will have experts who will recommend products and the store will also offer specialised service and experience, he said.

 

Over the next 12-18 months, the company is planning to launch 8-10 such stores across major metros and each store would attract an investment of around Rs 1-1.25 crore, said Budhraja, who noted the currently the company runs about 154 stores across the country, which sell all category of products, but these stores will focus only on these two categories.

 

Speaking about company's performance, he said, the company reported around 15-20% growth, CAGR, and expect to clock around 15-20% between 2014 and 2018. The company clocked a revenue of around Rs 2,200 crore and around 65% of which came from health and beauty products.

 

Amway India sells personal care and nutrition products as well as cosmetics through a direct selling business model that allows people to become members of the company and sell products to other people directly instead of through stores

 

The company has clocked in a turnover of Rs 2,288 crore, with 20% compounded annual growth rate over a period of five years. In the fiscal years 2011 and 2012, two of its brands from Nutrilite segment has reached revenue of around Rs 200 crore while the toothpaste brand Glister has registered a Rs 100 crore revenue. Its liquid detergent brand SA8 Gelzyme has also entered the Rs 100-crore revenue category, added the company.

 

Amway India has so far invested around Rs 200 crore in the country, and has 152 offices and 69 warehouses in India. Amway India is country’s leading direct selling FMCG Company. It has recently tripled production capacities at its vendor facility at Baddi, Himachal Pradesh by commissioning four new production lines at an investment of Rs 55 crore. The first phase at Baddi saw an investment of Rs 50 crore, taking total investment in Baddi to Rs 105 crore.