CANDICO becomes the 1st Indian multinational confectionery company

Company release, October 27, 2004

New Delhi

CANDICO, the Rs.125 crore Indian confectionery major, today announced its entry into the USD 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 USD 1 million plant in Tanzania (Africa) in October last year and has ramped up its capacity from 1800 tonnes to 3900 tonnes per annum. The company will further increase the plant capacity by 40% within a year. CANDICOs 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% revenues from international operations in the next 5 years.

The companys 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 6000 tonne manufacturing plant in Johannesburg (South Africa) at an investment of USD 5 million for catering to 7 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.

CANDICO 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, said Karan Gupta, Executive Director, CANDICO (I) LTD.

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.

CANDICOs announcement today comes in the wake of a trend of dominance by MNCs in the Indian confectionery industry. Its achievement in the global market is a significant reversal of this trend. With foreign 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 Mr. 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 the only company in India 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 worlds largest independent gum base manufacturer. This is the only tie-up Eurobase has ever entered into and is a testimony to CANDICOs quality standards, ethics and manufacturing skills. It also shares a joint venture relationship with Curt Georgi (Germany) - a world leader in flavours and fragrances. CANDICO is now looking at similar partnerships with other global players as it expands its operations in international markets.

The company has planned an equally aggressive domestic expansion strategy. CANDICO currently holds a 8% share in the Rs.1500 crore Indian confectionery industry, a significant achievement in a highly fragmented and largely unorganized market where only a handful of players can boast of national brands.

An impressive portfolio of 13 popular brands including Loco Poco, Koffi Toffi , Gumbo Jumbo, Gol Maal and Time Bomb generate a figure of over 2 billion confectionery products sold every year through a 1500-distributor strong country-wide network. CANDICOs growth plans include aggressive product concept introductions and even a possible foray into specialty retail.

We have identified specialty candy retail as one of the potential segments for future growth and are actively exploring the opportunity. Currently, 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 Mr Gupta.

CANDICO owns Indias largest integrated confectionery manufacturing facility. Located at Nagpur (Maharashtra), this state-of-the-art facility is spread over a sprawling 15-acre campus. With a production capacity of 45,000 tonnes, the plant also undertakes contract manufacturing for large players in the industry. Its current and prior clients include Nestle, HLL, ITC, Nutrine, Dalmiya Consumer Care and Euro Gadhia (London).

For further details, please contact:

Perfect Relations

Anuja Mathur,

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