Danone revives local plan, cuts capital outlay
has now proposed to convert its proposed 80 per cent subsidiary
into a 100 per cent company, and capitalise it to Rs 150 crore over
five years instead of the original plan for Rs 306 crore.
French dairy giant Group Danone is reviving its plans for India. It has now proposed to convert its proposed 80 per cent subsidiary into a 100 per cent company, and capitalise it to Rs 150 crore over five years instead of the original plan for Rs 306 crore.
However, during the first phase, the company will make an initial investment of only around Rs 14.5 crore.
When the company first showed an interest in the Indian market in 1996, it had proposed to make an equity investment of Rs 245 crore.
This was for a 80 per cent shareholding in the Indian joint venture, the balance 20 per cent reserved for a domestic partner.
Sources said the French firm now plans to manufacture and market its range of dairy and milk-based products such as yogurt, yogurt drinks, yogurt snacks, dairy desserts and cheeses. Among its leading brands are Danone, LU, Evian, Dannon, Galbani and La Serenisima.
Group Danone, which is one of the leading companies in the global fresh dairy foods, cereal biscuits and bottled water business, is Nusli Wadia's financial partner in Britannia Industries, with a 38.71 per cent equity stake.
Britannia manufactures cheeses, butter, milk products, etc. But legal consultants to Group Danone in India clarified that there will be no clash of business interests between the two firms.
Group Danone's independent plans, however, will face competition from Britannia's latest joint venture with Fonterra Cooperative Group, New Zealand's largest company and the fourth largest cooperative in the world.
The new JV intends to manufacture and market dairy products similar to the ones being lined up by Danone.
The French giant is reviving its business plans for India after over four years. The government approval granted in August 1997 remained dormant during the past years pending crystallisation of Group Danone's business plans.
The company could only issue 20 equity shares of Rs 10 each (amounting to Rs 200) which was the capital subscribed to at the time of subscription to the company's memorandum and articles of association.
The said shares are at present held by Cyrill S Shroff and MP Bharucha, both of whom are associated with the law firm, Amarchand & Mangaldas & Suresh A. Shroff & Co.
The company has not, however, unleashed any further business plans in the country so far, sources said.
The foreign holding in the company will be increased from the existing 80 per cent to 100 per cent through the transfer of 20 equity shares held by Bharucha and Shroff and by way of further investment of Rs 14.5 crore over a one year period.