McDowell plans foray into Pakistan

Consumption of liquor by Muslims is banned in Pakistan, but it isn't stopping Vijay Mallya from foraying across the border. UB group firm McDowell & Co is in talks with a bottling company in Pakistan to manufacture its premium whisky brand Black Dog.

"It will only be a small set-up as just 3 per cent of the Pakistani population is permitted alcohol consumption. But we are looking at the opportunity as we are trying to widen our footprints in the Saarc region," said Vijay Rekhi, managing director, McDowell & Co, and president (spirits division), UB group.

According to Rekhi, a bottling tie-up is already in place in Sri Lanka and the company is looking at getting a foothold in Bangladesh, Malaysia and even Myanmar through similar arrangements.

During UB's annual general meeting last week, chairman Vijay Mallya had reiterated the company's global ambitions and its target to become the third largest spirits manufacturer in the world with capacity of 50 million cases. Currently, UB sells close to 35 million cases a year.

Mallya had also said that UB would be looking at acquiring 'tail brands' of leading international distillers in the value Scotch segment for a presence in certain European and south-east Asian markets. McDowell is the largest liquor company with a market share in excess of 30 per cent and is the largest exporter from the country with sizeable presence in Middle East and Africa.

"We are looking to grow sales from 35 million to 50 million cases in the next three years and it will need significant investment," he said. According to him, UB has been investing close to Rs 35 crore on an average in capacity addition and replacement cost, and, hence, a major capacity expansion would mean investments of over Rs 100 crore.

The company has recently started selling its Rum brands in the US and UK and is targetting of a million cases in the next three years.