Sweekar brand goes to cargill

Analysts estimate the deal size at about Rs 340 crore.

Marico, the Mumbai-based consumer products major, on Friday announced it had entirely divested its Sweekar edible oil brand to Cargill India for an undisclosed amount.

The transaction takes immediate effect and assigns the Sweekar trademark and copyrights from Marico to Cargill. Analysts estimate the deal size at about Rs 340 crore. Sweekar’s annual sales last year was Rs 170 crore.

Marico had been looking to offload Sweekar for some time, but was unable to make much headway. It was reportedly in talks with the Kolkata-based Emami earlier, but the negotiations failed to fructify.

The need to divest Sweekar comes in the wake of the increasing focus of the company on the Rs 400-crore Saffola brand. The latter was chosen as its preferred vehicle in refined edible oils and health foods, Saugata Gupta, chief executive officer, consumer products division, said.

“We recognised that Sweekar has limited fitment in Marico's portfolio. However, with its legacy of a loyal franchise spanning two decades and the consumer connect that it commands, we believe it would be of value to Cargill, who can sustain and nurture it as a leading brand,” Gupta said.

Cargill's edible oil brands include Nature Fresh and Gemini. Its acquisition of Sweekar comes at a time when it is looking to enhance its edible oil business, which constitutes 60 per cent of its Rs 5,000 crore turnover. In an interaction with Business Standard last year, Siraj Chaudhry, chairman of Cargill India, had said the company was looking to close 201-11 with growth of 15-20 per cent in edible oils.

The annual market size for edible oil consumption in the country is 15.5 million tonnes, growing at about five per cent per annum. But the organised edible oil business, which constitutes 25 per cent of the market, is growing faster at about 15 per cent per annum.