Smithkline Lines Up Rs 125cr For Sonepat Horlicks Plant

SmithKline Beecham Asia (SBAP), the wholly owned subsidiary of SmithKline Beecham Plc of the UK (SB), has finalised an investment to the tune of Rs 125 crore at its new plant for Horlicks at Sonepat, Haryana. The plant's capacity has been fixed at 21,000 tonnes.

The parent company is expected to inject a major portion of the total investment of Rs 125 crore through (SBAP). Top company sources said though the exact funding pattern has not been decided, the UK parent is likely to be a major contributor.

The plant will cater mainly to the export markets with the surplus being sold in the domestic market. SmithKline Beecham Plc is closing down a similar plant in UK and requires another plant for outsourcing its requirement.

 

At present, Horlicks is being manufactured by SmithKline Beecham Consumer Healthcare, (SBCH), in which SmithKline Beecham of the UK holds 40 per cent, at its two plants in Rajahmundhry and Nabha. It pays a 5 per cent royalty on the Horlicks brand to SBAP.

One of the country's popular brands, Horlicks is the market leader in the 60,000 tonnes health beverage category. At a market share of close to 50 per cent, the brand is way ahead of its competitors like Heinz's Complan, Cadbury's Bournvita, and Nestle's Milo.

SBCH introduced a range extensions of Horlicks last year including Horlicks 3-in-1, Junior Horlicks and Horlicks Sandwich biscuits last year.

Though SBAP now owns Crocin and Tums brands in India, it is not permitted to make or market over-the-counter (OTC) products. SBCH markets it for SBAP on a cost-plus basis.

SBAP expects to obtain permission to market OTC products soon. Till then, SBCH will continue to produce and market them through its extensive marketing network of 950 wholesalers and 2.2 lakh retail outlets.

SBCH now exports to Asian countries like Myanmar, Bangladesh, Sri Lanka and is making efforts to broaden its export base to South East Asia and the Middle East.