Britannia Eyes Firms With Right Brands, Facilities

Britannia Industries Ltd, the bakery and dairy products maker, would be looking to buying out companies in the same lines of business with proper brands and manufacturing facilities.

"Resources would not be a problem for the right target," said Nusli Wadia, chairman, at the company's annual general meeting here on Saturday.

The exercise would run parallel to its present offer to shareholders to buy back shares to reduce its equity by three per cent. Britannia, formerly managed by the late non-resident businessman Rajan Pillai, was now controlled by the European foods giant BSN Danone and Wadia with a combined 44 per cent stake.

The company currently has free reserves of over Rs 150 crore. It had also raised Rs 50 crore through non-convertible debentures in the last fiscal. The company had acquired the brands and 49 per cent equity of Kwality Biscuits Ltd recently for Rs 30 crore.

Britannia would appoint a merchant banker to assist in identification and valuation of possible acquisitions soon.

Within its present business, Britannia would seek to strengthen and reposition its brands to become the leading producer in the market. This would help the company get better margins, said sources.

In the dairy and cheese segment, the company has already established itself as a major player with innovative packages and products despite strong competition.

In the biscuits market, in particular, major domestic manufacturers have been under pressure from small companies with strong local brands and look-alike packaging.

Besides, with the lifting of quantitative restrictions, the premium end of the market is being increasingly crowded by imported brands and new products.

Industry sources said the bakery business was experiencing unexpectedly strong sales on occasions such as Valentine's Day and domestic companies did not have products to tap these surges.