Dear fellow shareholders,
Its been another wonderful year for our company, with achievements on
every front - sales of over 125 million cases, expansion of market
share in the face of international competition, launch of Heineken in
select markets, packaging innovations, corporate reorganisation,
The list goes on!
Our company has clocked its highest ever volume growth of 23% during
the year under review, driven by a 27% growth in strong beer and a
healthy 16% in mild beer. In both segments, we have significantly
outperformed the market.
Kingfsher Ultra continues its run as the preferred premium lager among
discerning consumers, and has established its superiority over
competing offerings from leading international brewers.
The highlight of the year, is the success launch of locally brewed
Heineken in select markets. I am pleased that, through United Breweries
Limited, India is amongst select countries in the world where this
world leading premium brand is brewed. Connoisseurs confrm that in both
taste and packaging, UB''s offering matches the quality of Heineken
available anywhere in the world.
Many consecutive years of outperforming the market in key large states,
has enabled UBL to achieve a 54% national market share, the highest
ever.
Operating, as we do, in a highly regulated environment, control of
costs is an important element of our business, and considerable
attention has been paid to this by the management.
A very significant innovation that will have long term benefits for the
company, is the introduction of patented proprietary bottles. This
initiative means that UB''s patented bottles cannot be diverted to
alternate uses and this has had a salutary effect on the price of
second hand bottles.
Other cost containment initiatives, including use of biomass boilers
for co-generation of power, have helped to keep our overall costs down
despite an infationary environment. This has enabled us to achieve a
growth of over 45% in EBITDA in comparison to what was earned in the
previous year.
We are committed to a continuous process of improving quality and
vigorously attacking costs. To achieve this in the backdrop of robust
growth in volume requires the company to make continuous investments in
the manufacturing and sourcing end of the business.
With this intent, our company has earmarked investments exceeding
Rs.1000 crores over the next 3 or 4 years to not merely augment
capacities but also incorporate the latest technologies to improve even
further, the quality of our already excellent product range.
The high yield variety of barley patented by the Vittal Mallya
Scientifc Research Foundation has captured the imagination of the
farmers in northern India and the same is being sown in increasingly
larger acreages. The extension of cropping of this vital input bodes
well for the future availability of this most important raw material
keeping pace with rising demand. Simultaneously investments are planned
in malting facilities so as to stay abreast of our requirements.
Our company has a conservative financial position, with very little debt
in relation to its borrowing capacity. Our Debt to Equity ratio is also
very healthy and has been recently augmented through the sale of
Treasury Shares amounting to Rs. 285 crores. This enables us to raise
the resources required for the investment programme at attractive
rates.
You will recall that a number of acquisitions over the years had led to
a complex holding structure. The tie up with Heineken also brought the
Asia Pacifc Breweries'' two manufacturing facilities into our fold. In
an effort to simplify the corporate structure, integrate units, and
enhance both operating and tax synergies, a number of mergers, already
approved by all of us, have been completed and judicial orders in hand.
Accordingly, the accounts for the year ended 31st March 2011
incorporate the numbers for Associated Breweries and Distilleries
Limited, Millennium Alcobev Private Limited, Empee Breweries Limited,
Millennium Beer Industires Limited, United Millennium Breweries
Limited, UB Nizam Breweries Private Limited and Chennai Breweries
Private Limited.
Even as we focus on our consumers, we have not lost sight of the
communities in which we operate. We continue to be committed to
education, health care and water initiatives in each location that we
operate in. Not only have these won recognition from national &
international agencies, but most importantly, have helped to make the
lives of thousands of people better. It is our way of saying thank
you and giving back more than we take out of our environment.
I look to the future with optimism. Despite the palpable sense of a
slowing down of the global economy, India and its young population is
still imbued with anticipation of good times to come. United Breweries
is well placed to be a part of the good times, and this will translate
into higher sales with improved profitability.
All stake holders have contributed to the success of our company and I
look forward to the continuing and enthusiastic participation of all
our employees, customers, suppliers, bankers, and above all, you, dear
shareholders.
Thank You!
VIJAY MALLYA
CHAIRMAN
|