Candico spreads wings in Africa, Saarc & Gulf markets

NEW DELHI: Candico, the Rs.1,250 million Indian confectionery major, today announced its entry into the $ 100 billion global confectionery market with its first acquisition in Africa, making it the only Indian multinational in the confectionery segment.

Candico has invested in a $ 1 million plant in Tanzania (Africa) in October last year and has ramped up its capacity from 1,800 tonnes to 3,900 tonnes per annum.



The company will further increase the plant capacity by 40 per cent within a year. Candico's acquisition of the Tanzania plant makes it the only Indian confectioner to set up a manufacturing unit overseas and is the first phase of its global expansion strategy aimed at generating 50 per cent revenues from international operations in the next five years.

"Candico's second plant in South Africa will be followed by two more strategic acquisitions for catering to North and West African markets. We are steadily gaining a firm foothold in the global confectionery market," Candico India's executive director Karan Gupta told journalists here today.

The company's international expansion plans include a combination of organic and inorganic strategies, through strategic acquisitions and mergers, joint ventures or setting up of independent manufacturing facilities in individual markets.



It is also setting up a 6,000 tonne manufacturing plant in Johannesburg (South Africa) at an investment of $ 5 million for catering to seven countries in the South African region.

Having conducted an extensive market survey and competitor analysis in this market, Candico is gearing to tap the huge potential of this market where foreign brands have so far had very low penetration. Its plans beyond this venture are also well on their way.

The company will follow a strategy of offering its own brands in the international market, in addition to promoting the acquired brand portfolio. Brand Candico will be introduced in markets to which the company currently exports. These include Dubai, Baharain, Oman in the Middle East and Nepal, Sri Lanka and Bangladesh in the SAARC region.

Candico's announcement today comes in the wake of a trend of dominance by MNCs in the Indian confectionery industry.

"With foreign(owned) MNCs already dominating the Indian confectionery market, most of the domestic players have been marginalized. Not only has Candico withstood this threat, but is now venturing into the competitive global market as the first Indian MNC in the confectionery segment," added Gupta.

While the products will be marketed under a global brand name, the flavours and packaging will be customized for each local market. Candico is a company that manufactures all four categories of confectionery - candies, toffees, lozenges and gums - a strength that it will use for serving the wide-ranging demands of international markets.

More than a decade back, when only a handful of Indian companies were exploring international partnerships, Candico entered into joint ventures with leading European vendors for manufacturing world class products. It has a joint venture with Eurobase (Belgium) - the world's largest independent gum base manufacturer.

This is the only tie-up Eurobase has ever entered into and is a testimony to Candico's quality standards, ethics and manufacturing skills, Gupta said. The company also shares a joint venture relationship with Curt Georgi (Germany), a world leader in flavours and fragrances.



The company has planned an equally aggressive domestic expansion strategy. Candico currently holds an 8 per cent share in the Rs.15,000 million Indian confectionery industry.

Its portfolio of 13 popular brands includes Loco Poco, Koffi Toffi, Gumbo Jumbo, Gol Maal and Time Bomb and generate a figure of over 2 billion confectionery products sold every year through a 1500-strong country-wide distribution network.

"We have identified specialty candy retail as one of the potential segments for future growth and are actively exploring the opportunity. At present, the project is in the planning stage but when implemented, it will be the first of its kind initiative by any confectionery company in India," said Gupta.

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