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  1. 1. Presentation on UB Group Presented By: Rupak Choudhary 10 Nihar Nautiyal 29 Sweta Sharma 45 Shakti Singh 47 Suraj Singh 48 Puneet Soni 55
  2. 2. PRESENTATION SUMMARY <ul><li>INTRODUCTION </li></ul><ul><li>ORGANISATION AND PRODUCTS </li></ul><ul><li>STRATEGIES </li></ul><ul><li>INDUSTRY AND MARKETS </li></ul><ul><li>STRATEGY AND COMPETITORS </li></ul><ul><li>CONCLUSIONS </li></ul>
  3. 3. Introduction <ul><li>The UB Group was founded by Scottish gentleman Thomas Leishman in 1915. </li></ul><ul><li>The group started manufacturing beer from south Indian based British breweries and elected its first Indian director, Mr. Vittal Mallya in 1947. </li></ul><ul><li>Kingfisher the most visible and modest brand made its entry in 1960. </li></ul>
  4. 4. Contd… <ul><li>During the 60’s they added Mc dowell as a subsidiary which helped them to extend its portfolio in to wine & spirits business. </li></ul><ul><li>Latter on Mr. Vittal Mallya acquired UB Group and after his untimely deth in 1983, Mr. Vijay Mallya became the chairman of UB Group. </li></ul>
  5. 5. Mission & Vision <ul><li>We are focused on assuming leadership in all our target markets. </li></ul><ul><li>We seek to be the most preferred employer wherever we operate. </li></ul><ul><li>We recognize that our organization is built around people who are our most valuable asset. </li></ul><ul><li>We will always be the partner of choice for customers, suppliers and other creators of innovative concepts. </li></ul><ul><li>We will operate as a decentralized organization and allow each business to develop within our stated values. </li></ul><ul><li>We will be a major contributor to our National Economy and take full advantage of our strong resource base. </li></ul>
  6. 6. Group Business <ul><li>Breweries </li></ul><ul><li>Airlines </li></ul><ul><li>Fertilizers </li></ul><ul><li>Engineering </li></ul>
  7. 7. UB GROUP A Group in the process of Transformation FY 1990 FY 2006
  8. 8. UB Group- One of India’s leading wealth creators <ul><li>Market Cap : August 2006 </li></ul><ul><li>Five Core listed companies have a market cap of </li></ul><ul><li>USD 1.7 billion </li></ul><ul><li>Market cap has grown 10 times in last 5 years </li></ul><ul><li>Some of the large funds who have invested in McDowell </li></ul><ul><li>and United Breweries include- </li></ul>McDowell & Company Ltd Sloane Robinson LLP Goldman Sachs (Mauritius) Merril Lynch Capital Mkts DB Funds (Mauritius) FID Funds (Mauritius) Platinum Asset Mgnt United Breweries Ltd Oppenheimer Fund Inc Citigroup Global Mkts Goldman Sachs (Mauritius) FID Funds (Mauritius) Arisaig Partner (Asia) Pte HSBC Financial Services (ME
  9. 9. Group Holding Structure (UB City Project) Investments Real Estate Spirits Business United Spirits Shaw Wallace Ltd Beer Business United Breweries Millenium Alcobev Aviation Others Kingfisher Airlines Ltd. Aventis Pharma Mangalore Chemicals & Fertilizers UB Engineering UB (Holdings) Ltd. (36.54%) (37.50%) (50%) (100%) (10.28%) (30.44%) (34.74%) (55%) ( Erstwhile McDowell & Co Ltd) (75%)
  10. 10. UB Group Unique Leadership in both Beer and Spirits <ul><ul><li>Spirits : </li></ul></ul><ul><ul><ul><li>Controls about half the domestic market - 60% in first line brands </li></ul></ul></ul><ul><ul><ul><li>3rd largest player in the world </li></ul></ul></ul><ul><ul><ul><li>Has 5 brands which are in the Top 50 Spirits Brands World wide list of Impact International. </li></ul></ul></ul><ul><ul><li>Beer : </li></ul></ul><ul><ul><ul><li>50% market share nationally </li></ul></ul></ul><ul><ul><ul><li>Sold in over 52 countries </li></ul></ul></ul><ul><ul><ul><li>India’s 1 st global consumer brand </li></ul></ul></ul><ul><ul><ul><li>– Kingfisher </li></ul></ul></ul>Both Beer and Spirits share a common distribution channel
  11. 11. The UB Group’s competitive advantage <ul><li>Strongest brands </li></ul><ul><li>Significant upgradation </li></ul><ul><li>Least vulnerable to policy volatility due to large spread </li></ul>Branding Local Sourcing Value Chain ownership Segment-Market Presence Manufacturing Technology Beverage Business <ul><li>Optimal, as almost completely locally sourced </li></ul><ul><li>Largest manufacturing base </li></ul><ul><li>Maximum capacity utilisation </li></ul><ul><li>Initiatives planned for integration into retailing </li></ul>Management Team <ul><li>Professionally managed </li></ul><ul><li>Seasoned professionals with significant industry experience </li></ul>
  12. 12. Grand Strategies <ul><li>Expansion Strategies </li></ul><ul><li> Diversification </li></ul><ul><li> Cooperation ( M&A, JV/Foreign Collaboration ) </li></ul>
  13. 13. Acquisition of Shaw Wallace <ul><li>Shaw Wallace was the 2 nd largest player in spirits in India (MS - 15%). </li></ul><ul><li>UB Group acquired 75% stake for a consideration of USD 300 mio in July 2005 </li></ul><ul><li>Consolidation Plan </li></ul><ul><li>Action initiated to merge all the spirits entities into McDowell to create United Spirits Limited. </li></ul>USL 4
  14. 14. ACQ 1 <ul><li>Largest producer of sparkling wine in Saumur region. </li></ul>Acquisition of Bouvet Ladubay
  15. 15. Acquisition of Air Deccan <ul><li>The choice is simple. </li></ul>
  16. 16. Market Share Mar 06 Brand Market Share Mar 06 Indian Beer Market UBL 2
  17. 17. COMPANY SWOT ANALYSIS Strengths Threats Weaknesses Opportunities Market Leader Strong Brand Image Global Presence Aggressive Advertising Quality & Innovation Long Development Cycles Relatively Static Market Growth Expensive Brand Maintenance Demographic Changes Changing Societal Attitudes Consumer Brand Preference Demand for High Quality New Competitors Cloning of Successful brands Increasing Buyer Power Growth in Substitutes Economic Downturn
  18. 18. MARKET POSITIONING Airlines Price Quality Jet Lite+ Jet kingfisher Indian airlines Spice jet, Go Deccan
  19. 19. PORTER’S FIVE FORCES MODEL Industry Competitors Strong image, Brand Loyalty, and Innovative R&D. Potential Entrants Barrier to entry - customer loyalty, high set-up costs. Buyers Retailers power increasing. Substitutes Railways for airlines. Suppliers Global economies of scale keep suppliers prices low. Source: Porter, 1978
  20. 20. PRODUCT MARKET PORTFOLIO RMS MARKET GROWTH (%) 1.0 <ul><li>Breweries </li></ul><ul><li>Airlines </li></ul>15% 10% 18% 1.5 0.6
  21. 21. <ul><ul><li>Thank You </li></ul></ul>