Nestle Stake In Osem Queers The Pitch For Dabur

Dabur India plans to insist on an exclusive product agreement with Osem under which Nestle will not be allowed to enter the product segments earmarked for Dabur-Osem in India.

G C Burman, managing director of Dabur India told Business Standard: With a 40 per cent stake in Osem, Nestle could be in a position to block some of the decision of the Dabur-Osem board. Hence Dabur will have to reconsider its proposed joint venture with Osem in case such an arrangement cannot be worked out. Top executives from Nestle and Osem will meet Dabur India later this month in order to thrash out the details of the agreement.

 

Nestle, which already has a major presence in the foods segment in India, could give the Dabur-Osem joint venture stiff competition. Dabur, a major player in the domestic herbal and health products segment, is set to make a foray into the biscuits business.

It had signed a memorandum of understanding (MoU) with Osem, a leading bakery products company in Israel.

Osem is one of the largest food manufacturers in Israel with a product line which boasts of nearly 1,000 varieties of cookies and cakes, candies, savouries, wafers and sauces among other things.

The Indian company plans to enter the upper end of the biscuit market rather than go in for the lower mass market segment.

The Delhi-based Dabur group has also signed a joint venture with French cheese major Bongrais. The project is part of the group's diversification into new areas of the foods business.

It has already acquired seven acres of land in Noida to set up a manufacturing facility for Bongrais' range of cheese products. The launch of ethnic flavours like garlic, cumen is scheduled for January next year. The project will involve an investment of Rs 10 to Rs 12 crore.

Meanwhile, Dabur India launched its range of ayurvedic cosmetics in Delhi yesterday under the brand name Samara. The skin and hair care products will initially be launched in Delhi and later.

Apart from biscuits and cheese, the group is also launching fruit juice. A plant has been set up in Nepal for this purpose.