Amway Seeks Contract-Production Facilities

Amway India Enterprises (Amway), the wholly owned subsidiary of the US-based direct selling major Amway Corporation, is scouting for contract production facilities in India in two categories -- the nutrition & wellness range and the cosmetics range.

The company is also planning to diversify into new product categories such as water filter, food storage and cookware. Its long-term plan in India could also include co-branding agreements for products such as electrical appliances.

These steps are part of Amway's plan to net a turnover of Rs 700 crore during its accounting year September 2001- August 2002. It had clocked revenues of Rs 553 crore for the year ended August 31, 2001.

Amway managing director and chief executive officer, William S Pinckney, said the company is currently importing nutrition and cosmetics products and test marketing them in India.

"Our aim is that every product we sell in India should be produced within the country," he said.

Currently, Amway has four third-party contract manufacturers--- Sarvottam Care Ltd and Yodeva Plastics Pvt Ltd, both of Hyderabad, Jeju Plast of Pune and Naisa Industries of Daman-- for its personal care and home care products.

Pinckney said Amway has shortlisted some Indian firms for contract manufacture of nutrition and cosmetic products.

"We are evaluating their capabilities. The two categories call for highly sophisticated manufacturing processes," he said, and hoped that in the current accounting year, around 25 percent of the company's revenue will come from the nutrition and cosmetics, another 25 per cent from home care and 50 per cent from personal care products.

On co-branding, William said this was a long-term plan to be considered after entering the home tech areas-- water filters, food storage, cookware etc.

"In the US, our catalogue has 6,000 products not done by Amway," he said.

Pinckney said the Indian people had responded "very positively and enthusiastically" to the direct selling concept and this accounted for the 100 per cent growth the company has been registering over the past three years. While the direct selling sector in India registered a growth of 53.5 percent in terms of turnover last year, Amway registered 100 percent growth.