INDIA – Britannia Industries Ltd, India’s largest biscuit maker, has forecast low single-digit input cost inflation for the current fiscal year, around 3%.
Speaking in an interview, Varun Berry, company vice-chairman and MD said that the company will closely monitor input costs and will remain watchful of competitive pricing activities.
“We are now in a phase where inflation is going to be moderate and not what we’ve seen in the last two years,” he said.
Berry said Britannia has taken pricing actions to offset inflation in the last fiscal year. However, with some softening of material prices in the second half of the year and stepped-up cost efficiencies, the company is evaluating if any corrections in price need to be made.
The company expects an increase in volume growth despite that flour, sugar, and dairy remain under inflationary pressure, while palm oil has seen some easing after registering a very low volume growth in the last fiscal, however, in 2022-23, the company had sales of Rs 15,985 crore registering a growth of 15 percent.
According to the company, packaging materials such as laminates and corrugated boxes have also seen some deflation signaling good tidings ahead.
Britannia stated that dairy has seen the highest inflation during the March quarter versus last year by 54 percent adding that its snacks brand ‘Timepass’ is still being evaluated in the test markets and the company wants to ensure it has a winning combination before spreading it across the country.
The company said that the ongoing capex will be deployed in Uttar Pradesh, Tamil Nadu, Bihar, and Odisha.
Britannia is a 130-year-old company whose brands include Good Day and Marie Gold cookies in India.
The biscuit giant has been looking to add capacity in Africa, where governments want to expand their industries and reduce imports of products that can be made locally. As a result, it announced an investment of Rs 700 crore to ramp up its capacities at various locations.
Last year, the company acquired a 51% stake in Kenafric Biscuits, a subsidiary of Kenya-based manufacturing conglomerate Kenafric Group, a move that will help the company set up a manufacturing base and expand sales in the African markets.
In a filing with the Bombay Stock Exchange, Britannia Industries noted the deal was instigated by its subsidiary Britannia and Associates (Dubai) for INR92m (US$1.1m).