United Breweries
BSE: 532478 | NSE: UBL | ISIN: INE686F01025 | Breweries & Distilleries
- Directors Report
- Chairman's Speech
- Auditors Report
- Notes To Accounts
- Accounting Policy
- Finished Products
- Raw Materials
| Chairman's Speech | Year : Mar '07 |
Dear Fellow Shareholders, It gives me great pleasure to welcome you to this 8th Annual General Meeting of United Breweries Limited, which comes at the end of another successful year. As a result of the continual efforts by the industry, led by United Breweries, to encourage a supportive regulatory framework, the year witnessed success on the front in many North Indian markets. You will recall that the beverage alcohol markets in North India were typically controlled by private cartels that paid scant respect to consumer choice. Profiteering by these monopolistic cartels resulted in high end consumer prices for beer across most of North India, leading to very low consumption and poor profitability. Your Company had been championing the industry cause to change the regulatory framework in the States in favour of either a free market or distribution by Government undertakings. While the first, viz., free market is the most desirable operating environment for any business, it was felt that even a change over to State Government distribution would be a step forward, as the State undertakings are accountable to consumers. The current year saw this effort coming to fruition, with the States of Punjab & Haryana moving away from the existing pernicious auction system to a license fee based distribution system. Conseguently both these States witnessed a boom in demand, resulting in overall industry growth of nearly 30%. The overall volume for the industry stood at about 137 million cases at the end of March 200 7, of which our Company, along with its subsidiaries and associates sold 66.7 million cases. This signifies a record of sorts with beer consumption per capita reaching the 7 Itr per annum, which still continues to trail even emerging markets, which average about 24 Itrs per capita. Robust growth continues in the current year and is expected to reach sales of 155 million cases. In order to cater to these growths, United Breweries had embarked upon an investment plan totalling about Rs. 400 crores. This included setting up of two new greenfield breweries in Rajasthan and Orissa, which have been recently commissioned, as well as expansion of capacities at other locations. The two new breweries add over 8.5 million cases per annum to our capacity whereas expansion at other locations will increase the capacity of existing breweries by about 20%. We all have reason to be proud of Kingfisher Strong, which in eight short years since introduction, has overtaken Kingfisher Premium Lager to become Indias top selling brand of beer, with sales of over 26 million cases. The brand witnessed a growth of 45% during the period under review. Kingfisher Premium Lager continues to be Indias leading mild beer, commanding a market share of nearly 66% of the mild beer market. Overall, the Kingfisher brand soars over the industry with nearly 2 out of every 5 beers consumed in the country being a Kingfisher. Many innovations are under way including the Kingfisher Strong 330ML Can, the Kingfisher 330ML pint bottle, the 500ML King Can and also a multi-can pack. I have long believed in brand building and over the years, our Company has been in the forefront of Indian FMCG companies in this regard, making Kingfisher one of the most well known and respected aspirational consumer brands in the country. Survey after survey has demonstrated the close links that the brand has successfully formed with the youth of India, who are emerging as a large consuming base for the future. Kingfisher continues to be the iconic representation of the good things in life, which the youth of India aspire to. These investments in building up the brand equity of Kingfisher in a multiplicity of ways will stand the Company in good stead particularly with the entry of a number of multinationals into the Indian market, in anticipation of explosive growth over the next decade. Several international brands have made forays in the past only to meet with very limited success in the face of our Companys offering as well as our dominance over the Indian distribution infrastructure. In keeping with our caring traditions, United Breweries has also made significant investments in socially desirable areas. Rainwater harvesting, protection of ground water, investment in bio-mass boilers, which use agricultural waste as fuel, and establishment of primary health and education facilities in villages adjoining the Companys breweries, are examples of various such initiatives. As a consequence of all the foregoing, the capital market recognizes our Company as one of the leaders in the field, and all of us, as shareholders, are being rewarded appropriately by the markets. The market capitalization of United Breweries last September was about Rs.3000 crores, which has more than doubled itself currently to be in excess of Rs. 6600 crores, despite trying market conditions. I am sure that you all share my happiness in this reward and recognition. It remains for me to say thank you to all who have contributed to our success, namely, our staff, directors, customers, suppliers, bankers and most importantly all of you - our shareholders. Dr Vijay Mallya Chairman |
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| Source : Religare Technova | |
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