Chauhan consolidating Bisleri prior to stake sell

Parle Exports honcho Ramesh Chauhan is on a consolidation drive. To obtain better operational synergies, he plans to amalgamate his mineral water businesses to form one single company from the eight separate companies with 16 manufacturing locations as it operates currently.

"We were left with up to eight different companies after selling Thums Up, Gold Spot and other brands to Coca-Cola earlier in the decade. At present we are in the process of amalgamating all these into one single company," Chauhan revealed. He told newsmen in Mumbai recently that it would take between six to eight months for the consolidation process to be complete.

He said the financial status of the Bisleri business would not change after the myriad companies are merged into one. "At present we generate Rs 2 billion annually from the mineral water business and this will remain unaffected by the amalgamation process," he said.

Chauhan claims that currently his company produces as many as 200,000 bottles of Bisleri every day across the various manufacturing facilities. He said that the capacity utilisation at his plants is being increased continuously to meet the growing demand and added that the business was witnessing a 140 per cent growth currently.

Chauhan's latest moved come at a time when the Rs 8-10 billion mineral water market in India is witnessing hectic alignments and joint venture on the part of both Indian and MNC players. Bisleri, which is the largest Indian brand, leads the market. Swiss major Nestle has launched Perrier and San Pellegrino brands this year, while Danone, which is the second largest bottled-water company in the world, has brought Evian and Volvic brands to India.

In recent months, Chauhan has been busy negotiating with several multinational companies including Coca-Cola Company, Nestle and Groupe Danone for selling off a minority stake in his company. But Chauhan has always declined to talk about the stake sale or about any negotiations whatsoever.

However, industry observers pointed out that the proposed stake sale in a consolidated Bisleri could bring in up to Rs 5 billion into the venture. Industry sources confirmed that Chauhan would hold 60 per cent stake in the proposed JV, while the remaining 40 per cent equity and the Bisleri brand would be transferred to the foreign partner.

Chauhan had similarly sold off Thums Up, Limca, Gold Spot and Citra brands to Coca-Cola in 1993 for an estimated $ 40 million immediately after the US soft drink giant entered India. Earlier this year Chauhan began negotiating with Coca-Cola to sell Bisleri but the talks failed and Coca-Cola launched its Kinley mineral water in the country some months back.

© 2000 agencyfaqs!