CavinKare plans Rs 500 cr expansion into foods segment

Chennai-based FMCG company CavinKare is planning to invest around Rs 500 crore over the next two years in various expansion plans, including a greenfield facility for namkeen at Thane, cool drinks in the North and others. The company also said it would go for an initial public offering (IPO).

Speaking to Business Standard, CK Ranganathan, managing director, CavinKare, which introduced shampoo in sachets, said that the company was planning to set up a greenfield facility at Thane for Garden Namkeens Private Limited, a Mumbai-based FMCG company, which was acquired by CavinKare in 2009.

“This business is doing well. We will end up closing the year with a turnover of Rs 60 crore and next year we are planning to double it,” he said.

Currently, Garden Namkeens is engaged in manufacture and sale of a range of snacks, namkeens and sweets under the brand name Garden in Maharashtra.

“We could not penetrate into other parts of the country due to capacity constraints,” Ranganathan said. To address the issue, the company is investing around Rs 75 crore to set up a facility at Thane.

The facility can generate around Rs 200 crore and will go onstream in March 2011, said Ranganathan. The company is planning to introduce the brand in South and West, once the plant goes on stream.

CavinKare, which entered the fruit drink segment by acquiring 100 per cent of the fully paid-up equity share capital of MAA Fruits in 2009, is planning to take the brand across the country.

“In the next two years the brand will have an all-India presence and will clock a turnover of around Rs 500 crore in the next five years,” he said. The company is looking at putting up a facility in north India to cater to north Indian market.

Currently MAA’s portfolio includes mango, pineapple, apple and pink guava and it is available in 250, 500 and 1,000 ml PET bottles and 200 ml tetrapack configuration and is largely sold in bakeries and juice shops in temple towns like Sabarimala and Tirupati and other parts of Andhra Pradesh and Tamil Nadu.

This year the brand would clock a revenue of around Rs 100 crore, an increase of 25 per cent, said Ranganathan.