ITC joins fight for Horlicks

The battle over acquiring two of the leading MFD brands – Complan and Horlicks seems to be hotting up with the Kolkata-headquartered FMCG major ITC leading formally joining the race. ITC Ltd would be interested in acquiring GlaxoSmithKline’s malted food drink (MFD) brand – Horlicks, albeit with a rider – ‘if it comes for a right price’, said ITC’s CEO Sanjiv Puri. For ITC, which recently launched its packaged milk processing facility, malt-based brands could be a natural addition to its expanding food portfolio. Earlier, there were indications that the Kolkata-headquartered conglomerate might be interested in the Kraft Heinz-owned brand – Complan also. However, Puri said, “Complan is off now. But we would certainly be interested in Horlicks if it comes for a righ price. Pictures are likely to be clearer in the next one month, when bids are invited.” Besides ITC, Emami, Wipro, ITC, Abbott, Zydus Wllness) and the big PE firms like Blackstone and Carlyle were learnt to be initially interested in Complan. Earlier, ITC chairman Y C Deveshwar also hinted that the company would be interested in expanding into protein-based food products portfolio.

The MFD industry in the country is estimated to be nearly Rs 8,000 crore, where Horlicks reportedly enjoys the leadership position with nearly 44.3 per cent value market share. Complan at present, has nearly 8 per cent market share in the malted food drink (MFD) industry. The MNCs were looking for an exit possibly because of intensifying competition.

Meanwhile, the company is also planning to enter newer categories and segments even while strengthening its FMCG (fast-moving consumer goods) portfolio. Last year the company rolled out nearly 30 new products and got into four new categories including perishables like Farmland Potato, Farmland Apple, Frozen Prawns under ITC Master Chef brand, dehydrated onions, cake and so on. This year also the numbers will be more or less similar, said Puri, adding that the company would tap the frozen snack segment in a big way under the ITC Master Chef brand.

On the hotels segment, as a whole, Puri said, the company would adopt an “asset right” model, which is a mix of owned property and managed property. At present, nearly 60 per cent of its hotels are company own?ed while 40 per cent are managed. In the next few years, the company is looking at a 50:50 break-up.

Meanwhile, cigarette-to-FMCG major ITC Ltd is pursuing a long-term strategy to build a cost-effective cold chain for preventing agricultural wast-age. The agri-wastages, estimated to be Rs 92,000 crore, deprive farmers of a potentially large source of income. “Recognising the crucial need to unlock the lost value trapped in agri-wastage, the company is actively pursuing a long-term strategy to build a cost effective cold chain that will contribute to raising rural incomes and lend a new growth driver to your company's agri-business,” said Deveshwar.