Britannia Industries


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Britannia Industries

  1. 1. Britannia Industries From Wikipedia, the free encyclopedia Jump to: navigation, search Britannia Industries Limited Private Type 1892 Founded Kolkata and Bangalore; R&D Chennai, Headquarters India No. of 300 stores (2000) locations India Area served Nusli Wadia, Chairman Key people Ms. Vinita Bali, (Managing Director) Food Industry Biscuits Tiger, Britannia, Products milk ▲ Rs 2,200 crore Revenue Danone, Kalabakan Investments Owner Wadia BSN, Parent Associated Biscuits Intl. Holdings
  2. 2. Website Britannia Industries Limited is an Indian company based in Kolkata that is famous for its Britannia and Tiger brands of biscuit, which is highly recognised throughout the country. Britannia is India’s largest biscuit firm, with an estimated 38% market share.[1] The Company's principal activity is the manufacture and sale of biscuits, bread, rusk, cakes and dairy products like cheese, butter and milk. The Britannia's fame is largely acknowledged through the colourful Britannia logos that Indian cricketers such as Virender Sehwag, and Rahul Dravid wear on their bats. Contents 1 Growth and profitability 2 Business o 2.1 Dairy products  2.1.1 Joint venture with New Zealand Dairy o 2.2 Biscuits 3 Ownership and relationship between major shareholders 4 References 5 See also 6 External links [edit] Growth and profitability The company is a growing and profitable one. Between 1998 and 2001, the company's sales grew at a compound annual rate of 16 per cent against the market, and operating profits reached 18 per cent More recently, the company has been growing at 27 per cent a year, compared to the industry growth rate of 20 per cent, At present, 90 per cent of Britannia’s annual revenue of Rs2,200 crore comes from biscuits [edit] Business [edit] Dairy products Dairy products contribute close to 10 per cent to Britannia's revenue.[2] Britannia trades and markets dairy products, and its dairy portfolio grew at 47% in 2000-01 and by 30% in 2001-02. Britannia holds an equity stake in Dynamix Dairy and had outsourced the bulk of its dairy products from its associate. Its main competitors are Nestle India, and the National Dairy Development Board (NDDB).[3]
  3. 3. [edit] Joint venture with New Zealand Dairy On October 27, 2001, Britannia announced a joint venture with Fonterra Co-operative Group of New Zealand, an integrated dairy company from procurement of milk to making value-added products such as cheese and buttermilk.[3] Britannia planned to source most of the products from New Zealand, which they would market in India.[2] The joint venture will allow technology transfer to Britannia.[3] Britannia and New Zealand Dairy each holding 49% of the JV, and the remaining 2 per cent held by a strategic investor. Britannia has also tentatively announced that its dairy business would be transferred and run by the joint venture.[3] Authorities' approval to the joint venture oblige the company to start manufacturing facilities of its own. It would not be allowed to trade, except at the wholesale level, thus pitching it in competition with Danone, which had recently established its own dairy business.[3] [edit] Biscuits The company's factories have an annual capacity of 433,000 tonnes.[1] The brand names of biscuits include VitaMarieGold, Tiger, Nutrichoice Junior,Good Day, 50 50, Treat, Pure Magic, Milk Bikis and Good Morning. Tiger, the mass market brand, realised $150.75 million in sales including exports to countries including the U.S. and Australia, or 20% of Britannia revenues in 2006. The company alleged that Danone has violated its intellectual property rights in the Tiger brand by registering and using Tiger in several countries in 2006 without the consent of the Britannia Board. Managing Director Vinita Bali claims the company found out in 2004 Danone launched the Tiger brand in Indonesia in 1998, and later in Malaysia, Singapore, Pakistan and Egypt when it attempted to register the Tiger trademark in some of these countries.[4] Whilst it was initially reported in December 2006 that agreement had been reached,[5] it was reported in September 2007 that a solution remained elusive.[4] In the meantime since Danone's biscuit business has been taken over by Kraft, the Tiger brand of biscuits in Malaysia has been renamed Kraft TiGER Biscuits beginning September 2008. Britannia initiated legal action against Danone in Singapore in September 2007.[6] [edit] Ownership and relationship between major shareholders The Wadias' Kalabakan Investments and Groupe Danone have two equal joint venture companies, Wadia BSN and UK registered Associated Biscuits International Holdings Ltd., which together hold 51 per cent stake in Britannia.[7] The ABIH tranche was acquired in 1992, while the controlling stake held by Wadia BSN was acquired in 1995. It was agreed that, in case of a deadlock between the partners, Danone is obliged to buy the Wadia BSN stake at a quot;fair market valuequot;. ABIH which has a separate agreement signed in 1992 and is subject to the British law.[7] [8]
  4. 4. Wadia was to be Danone's partner in the food and dairy business, and product launches from Groupe Danone’s were expected but never materialised despite the JV being in existence for over 11 years in India.[7] Under the 1995 joint venture agreement, Danone is prohibited from launching food brands within India without the consent of the Wadias.[9] In addition, the partners agreed there would be the right of first refusal to buy out the remaining partner in the event of the other wishing to sell its holding.[10] In May 2007, Nusli Wadia told the Ministry of Commerce and Industry that Danone invested in a Bangalore-based bio nutrition company, Avesthagen, in October 2006 in violation of the government's Press Note 1, 2005, which requires a foreign company to obtain the consent of its Indian joint venture partner before pursuing an independent business in a similar area, including joint ventures based purely on technical collaboration. Danone argued that Press Note 1 did not apply to it as it did not have a formal technology transfer or trademark agreement with Avesthagen, and that its 25 pct holding in Britannia was indirect.[11] Wadia also filed a case in the Bombay High Court for a breach of a non-compete clause in that connection. The court ordered Danone not to alienate, encumber or sell shares of Avestagen.[12] In September 2007, the Foreign Investment Promotion Board of India rejected Danone's claims that it does not need a non-compete waiver from the Wadias to enter into business in India alone.[13] In June 2006, Wadia claimed Danone had used the Tiger brand to launch biscuits in Bangalore.[10] [edit] References 1. ^ a b Ruchita Saxena, Battle-scarred Britannia on expansion spree, Business Standard, October 06, 2007 2. ^ a b Abhrajit Gangopadhyay, Danone move may hit Britannia's dairy plans, Hindu Business Line, January 7, 2002 3. ^ a b c d e Aarati Krishnan, Britannia Industries: Pare exposures, Hindu Business Line, Feb 03, 2002 4. ^ a b Ruth David, Indian Cookie Maker Taking Danone To Court, Forbes, September 20, 2007 5. ^ Danone to return 'Tiger' to Britannia, Knight-Ridder Tribune Business News, December 4 2006 6. ^ Britannia sues Danone in S'pore, Deccan Herald, September 21, 2007 7. ^ a b c Dev Chatterjee, Danone takes arbitration route to end Wadia ties, Business Standard, July 1, 2007 8. ^ Kala Vijayraghavan, ABIL joins Britannia-Groupe Danone battle, The Economic Times, 21 Nov, 2006 9. ^ Ruth David, Danone's Indian Cookie JV Set To Snap, Forbes, June 25, 2007 10. ^ a b Danone may dissolve ties with Britannia, IRIS NEWS DIGEST, 21 June 2007, Retrieved 2007-07-18 11. ^ Danone denies JV with India's Britannia; to proceed with solo plans - report, Thomson Financial, 25 May 2007 12. ^ Wadias take Danone to court, December 5, 2006 13. ^ Danone needs NOC from Wadias: FIPB, 28 September 2007
  5. 5. [edit] See also Wahaha [edit] External links Brands described at Superbrands India, 2003 Company website Companies portal This article on an Indian company is a stub. You can help Wikipedia by expanding it. Retrieved from quot;; Categories: Food companies of India | Danone brands | Indian company stubs Hidden category: Portal:Companies/Total Views Article Discussion Edit this page History Personal tools Log in / create account Navigation Main page Contents Featured content Current events Random article Search Go Searc h Interaction About Wikipedia Community portal Recent changes Contact Wikipedia
  6. 6. Donate to Wikipedia Help Toolbox What links here Related changes Upload file Special pages Printable version Permanent link Cite this page This page was last modified on 11 December 2008, at 05:33. All text is available under the terms of the GNU Free Documentation License. (See Copyrights for details.) Wikipedia® is a registered trademark of the Wikimedia Foundation, Inc., a U.S. registered 501(c)(3) tax-deductible nonprofit charity. Privacy policy About Wikipedia Disclaimers