Oct 04, 2011, 04.53 PM | Source: PTI
Breakfast cereal maker Bagrry's today said it is looking at acquiring companies or brands worth up to Rs 50 crore as it plans to enter new categories like natural food.
The company, which is gearing up to enter packaged Indian breakfast range, also said it will invest Rs 15 crore on expanding the production capacity, which includes setting up a new plant, and marketing activities.
"For a faster growth, acquisition is important. We are looking for acquisitions, may be in some other categories like in natural food. Besides, it should also take care of our distribution as well," Bagrry's India Managing Director Shyam Bagri told PTI.
Asked about the size of the acquisition, Bagri said the company will be looking for deal size of around Rs 50 crore and has started talking with few firms though he did not divulge further details.
The company is also looking at expanding its portfolio by introducing a range of packaged Indian breakfast food in the next six months. The firm sells four products in the breakfast cereal category - oats, muesli, wheat bran and cornflakes.
"We are working on several products like the ethnic Indian style breakfast food but with the goodness of certain ingredients for instance 'Upma'. It will be packaged and ready to use and something which Indian consumers would have a taste for like brown sushi," Bagri said.
According to him, the Indian breakfast market is around Rs 2,000 crore, of which cereals like cornflakes, oats and muesli comprise around Rs 500 crore.
Besides, the company is also in the process of setting up its third plant in Ghaziabad apart from expanding its two existing facilities in Himachal Pradesh and Rajasthan.
"In next 18 months, in all the three plants put together we are looking at capital expenditure of over Rs 10 crore, mainly in our Ghaziabad plant," Bagri said, adding that the new facility will be operational by 2013.
On the back of the expansion plans, Bagrry's is eyeing an overall turnover of Rs 300 crore in the next two years, of which around Rs 100 crore will come from its cereal business.
"With the production facility in place there should be substantial jump in the turnover. In the next two years, we expect a turnover of Rs 100 crore from the branded business," he said.
In 2010-11, the firm had a turnover of Rs 120 crore.