Britannia to ramp up rural distribution, manufacturing

Has lined up capex of Rs 500 crore

Britannia Industries, which recently pipped Parle to attain first position in the biscuit market, has lined up a slew of new launches and is also looking to streamline its distribution network. The company has set aside Rs 500 crore as capital expenditure for the current financial year.

During the annual general meeting (AGM) here on Tuesday, Britannia chairman Nusli Wadia said the company would focus mainly on innovation and capacity addition.

“We are expanding capacity like never before and the improvement has been very consistent in terms of operating margin.” Referring to the April-June 2015 results, Wadia said: “This is the best result in terms of margin and profit in the history of the company.”

 

Varun Berry, managing director, attributed the company’s success to “superior products, better packaging and robust distribution network”. “We have at present 7,000 rural distributors. Within three years, we want to be present in all villages,” said Berry.

The company will also phase out a few manufacturing units in the current financial year. At present, the company has about 30 medium sized factories. “We will close down some, but there are 14 contract manufacturers where we have the scope of expanding the capacity,” Berry added.

 

Britannia is working on a lean distribution model to supply products directly from its manufacturing units to retail outlets across the country. In 2014-15, Britannia products reached one million outlets, which the company wants to expand this year. “We will continue to reduce the distance by making the right product at the right place,” Berry said.