Parrys Confectionery Eyes Fun Foods In Expansion

The Chennai-based Parry's Confectionery Ltd, a part of the Murugappa Group, plans to enter the fun-food segment as part of an aggressive marketing and diversification plan.

Parry's had posted a loss of Rs 16.58 crore in 1999-2000 against a net profit of Rs 3.6 crore in the previous year. There was also a drop in sales from Rs 139 crore to Rs 94 crore.

"We are confident of a turnaround this year after last year's losses. A strong team has been put in place, and the weaknesses that surfaced last year are being corrected," vice-president S K Ghatak said yesterday.

 

Ghatak, who shifted to Parry's from Hindustan Lever earlier this year, looks confident of bringing back the 86-year-old sugar boiled confectionery (SBC) major to the numero uno position it enjoyed for long before being overtaken by neighbouring Chittoor-based Nutrine Confectioneries Company Ltd.

"Nutrine enjoys 26 per cent market share against our 25 per cent. We will be back to the No.1 slot by September," said Ghatak.

There are half-a-dozen major players in the organised sector of the SBC business, which accounts for around 80,000 tonne of confectioneries per year against 65,000 tonne from the unorganised sector.

Parry's, with two factories, one in Nelikuppam and another in Manapakkam, both in Tamil Nadu, has a capacity of 25,000 tonne of confectioneries per year. It is operating at an average of 70 per cent capacity utilisation.

Ghatak maintains that results have already started showing up. "In the quarter ending March 31, 2000, the turnover increased 25 per cent by value and 15 per cent by volume compared with the last year. Losses was also cut by Rs 5 crore in the last quarter of 1999-2000," Ghatak said.

He attributed last year's losses to failures in product launches, inability to quickly respond to changing customer preferences and competition and poor working-capital control.

"We now have a strong R&D set-up. We have also interacted with consumer panels. I am confident that given the positive results from market research, we will get our act together very quickly, Ghatak said, adding that they have already launched a major consumer promotion programme this year.

Talking on the entry into the fun-food segment, Ghatak ruled out Parrys once again venturing into biscuit making. "We tried it once, but failed. We have no plans of a re-entry," he said.

"It could be other fun foods, say potato wafers and the like. But that will be a long term programme, may take three-five years. At the moment, we are concentrating on rebuilding," he said.

Parry's is focusing on three of its popular brands Coffy bite, Lacto King and Madras Cafe immediately.