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Britannia slates Rs 700 crore investment to have units in TN, Bihar, Orissa
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Wednesday, 22 July, 2020, 08 : 00 AM [IST]
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Our Bureau, Bengaluru
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Britannia Industries has ensured to keep a zero stock reduction in the market and have its supplies access only 320 km from its factory locations. This is part of the zero Inventory strategy to reduce the storage costs that helped the company garner the much-needed liquidity to enable expansion. Over the next two years, it has envisaged investment to the tune of Rs 700 crore to have production units at Tamil Nadu, Bihar and Orissa.
“We allowed our plants to be cent-percent efficient with production of only staple products. We were able to leverage the fixed costs, overheads and packaging by contract manufacturers. This helped the company to improve its net income,” said Varun Berry, managing director, Britannia Industries, in a press webinar.
The trend in demand indicated higher rural consumption and the urban consumer curtailed expenses. While the lockdown following the Covid-19 saw widespread disruptions in supply chain, the rural areas indicated positive sales as it was devoid of the pandemic. “We saw better monsoons and good agriculture growth.”
“On the urban front there was an increased home consumption with no scope for out of home or on the move intakes. People preferred the trusted brand, focussed on hygiene and safety and health. There was a surge in sales only from neighbourhood stores. Much of our sales were driven from rural over urban,” he added.
“We are available in wholesome quality and for the next couple of months will continue in the same way.
While it is impossible forecast for tomorrow during these uncertain times, we are not devising any strategies at this point of time but only looking to grab whatever opportunities that come. This will remain like this at least for the next 6 to 9 months. There is no space for innovation although we launched the Winkin Cow lassi in the eastern and western markets and the 5-layered cake,” said Berry.
The company is now eyeing technology interventions to have better entry into the market. It is installing the distribution management system and will also use artificial intelligence to have better understanding of the customers.
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