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| Tuesday, 17 August 2004 |
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Ceylon Biscuits buys Rs. 250 m Bakemans plant
Ceylon Biscuits Ltd (CBL) has purchased Bakemans biscuits manufacturing plant in India in its effort to go international. The value of the asset is Rs. 250 million. The company will initially target a market share of 12% in India CBL Chairman Mineka P. Wickramasingha said that CBL's aggressive approach in venturing into new areas of business has always proved to be a success. The Bakemans brand of biscuits that had been the No. 3 player until recent times was produced in this factory. Britannia and Parle who lead in value and volume respectively dominate the Indian market. Bakemans entered the Indian market in the 80s and during their peak time during late 97/98, they reached 13% of the huge Indian biscuit market. To have achieved such heights amidst established competition from Britannia's and Parle's is a great achievement. Sharp marketing strategies and product quality were key factors for their success. "Before Ceylon Biscuits Ltd (CBL) made a bid - a few Directors along with others personally conducted market surveys and came to the conclusion that the top of mind brand recall for Bakemans as a quality product was encouraging. In fact, CBL had been eyeing Bakemans since it closed its operations. Unfortunately, at that time when CBL wanted to offer a bid, Britannia with its clout monopolised that situation", Wickramasingha said. "They did not proceed and Bakemans got into more and more difficulties. Eventually, the financial institutions headed by SICOM took over the assets and auctioned it in Court. CBL was the highest bidder, the others were Saudi Arabian biscuit company, Indian Tobacco (ITC) and Britannia. On July 30 despite a few protests by the previous owners, the Court upheld the CBL original bid and awarded them the tender. In addition to this new factory, CBL has a biscuit manufacturing operation at present in the Industrial Zone of Marai Malai Nagar in South India. India is a colossal market and to be a meaningful player, it is necessary to enter this market with an aggressive approach. The Indian operation Ritzbury India (Pvt) Ltd was a stepping stone for CBL going international and then multi-national. The opportunity is now available. After acquiring the assets of Bakemans, to be the No. 3 player in the Indian Biscuit market is an aspiration. Due to CBL's penetration through its quality products into overseas markets which include the Americas, Europe, Middle East, Australia and the Asian region, the popularity gained would be an asset for marketing the brand in India. The success of this venture would be another step towards achieving CBL's vision of being the No 1 biscuit Brand in Asia. (SP) |
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