Amway prefers Gujarat over TN for its first plant in India

Direct selling fast moving consumer goods company Amway India has finalised Sanand in Gujarat 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.

At present, Amway India has a vendor plant in Baddi, Himachal Pradesh. The company had recently tripled the production capacity at the contract manufacturing plant at Baddi by adding four new production lines. The US-headquartered FMCG company 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), did not wish to comment on the location of the upcoming plant. Sources in the state industries department, however, confirmed the development and said the company had earlier sought for land from the Gujarat government, but things did not fall in place then.

"They had asked for 30-40 acres 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 headquarter,” 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 invest Rs 40 crore for 35 acres of land.

Amway has clocked a growth rate of 27 per cent in Gujarat at Rs 85 crore in 2011 (the company follows a January to December financial year). This is better than its national growth rate. It touched a turnover of Rs 2,130 crore in 2011, up 19 per cent from Rs 1,790 crore in 2010.

"In Gujarat, we have recently opened operations in Anand, Valsad and 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 it would be aligned to meet the company's growth strategy for the next 10 years. The company plans to touch a revenue of Rs 2,500 crore during the current financial year.

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