Publication : Business Standard
Date:23.08.2014

Mondelez International, the parent company of Cadbury, will bring more biscuit brands into India as the $36-billion (Rs 2.16-lakh-crore) US foods major's focus in one of its key Asia-Pacific markets is snacks, Global Chairman and Chief Executive Irene Rosenfeld said in a select media briefing here on Friday.

"We are the world's largest biscuit company and we will bring more biscuit offerings into India," said Rosenfeld without specifying which brands would be brought to the country. Currently, Mondelez, the largest chocolate player in India, has the Oreo brand in the domestic marketplace, introduced two years ago. Other biscuit brands in its global portfolio include Nabisco, Ritz, Belvita, Barni and Mikado. Speculation is that brands such as Nabisco could find their way into the Indian market as the US major steps up its focus on India.

"We are also focusing on our rural route to market, and digital and social media in our bid to grow our business here," said Rosenfeld.

Rosenfeld, 61, who ranks 15th on Forbes' list of global power women and who was responsible for acquiring Cadbury in 2010 and then breaking up what was earlier Kraft Foods into two in March 2012, is making her second trip to India in three years.

Her trip also comes at a time when Mondelez has elevated Manu Anand, India head and managing director, to a regional role in a global management reshuffle. She also comes visiting three months after the Bombay High Court directed Mondelez to pay Rs 2,014.50 a share (in an order dated May 9) to buy back its stock from minority shareholders as part of its delisting procedure. The buyback had faced repeated challenges from the latter since the original offer of Rs 1,340 a share was made in 2009 by the company. Mondelez has said that it will proceed to comply with the necessary requirements under law, though a threat of an appeal against the order by minority shareholders looms large.

Mondelez is also adopting a new operating model in the Asia-Pacific region besides Latin America, Eastern Europe, West Asia and Africa, where regional category teams will assume full profit and loss responsibility for their respective categories so far vested with the country head. The latter will, henceforth, drive sales and marketing and distribution for the company and work with category heads to drive growth, Rosenfeld said. The new model will come into force next year.

"I come from China (to India) on Thursday because I consider Asia to be a very important region," said Rosenfeld. "I have had a very hectic two days (in India), inaugurating our new office in Mumbai, meeting Manu's team, doing a review of our business and brands and meeting shopkeepers as part of my initiative to spend time in the marketplace. I did not meet consumers this time round, but it has been a whirlwind trip," she said.

India, where the local unit was rebranded Mondelez India Foods from Cadbury India this April, ranks among the top three Asia-Pacific markets for the global major after China and Australia, with revenues of Rs 4,000 crore. While growth has slowed from levels of 25-30 per cent for the Indian unit in the past two years to about 14-15 per cent now, Rosenfeld says she is confident business will pick up.

"I am confident that double-digit growth (of the Indian business) will continue. In the past four years, we have made an investment of $400 million (Rs 2,400 crore) in new and existing projects in India," she said.

"But now with the investment we are making in a new plant in Andhra Pradesh, this should help us take care of those needs."

Mondelez's proposed 250,000-tonne, multi-product plant at SriCity in Andhra Pradesh will be its largest in the Asia-Pacific region. The first phase is expected to go on stream by mid-2015. Rosenfeld said the plant would begin with the manufacture of chocolates before moving to other categories. The plant, which will be completed by 2020, will also act as a manufacturing hub for Mondelez to service neighbouring markets, she added.

New structure to aid growth

Rosenfeld clarified that the new operating model that Mondelez will introduce in Asia-Pacific and other regions will help in transfer of ideas from one part of the world to the other. "We found the region category structure to be quite effective in the European markets where it was first introduced and are hence taking it to the rest of the world where we operate."

As part of the new structure, Anand becomes president, regional category team, chocolate, reporting to Tim Cofer, executive vice-president and president - Asia-Pacific and EEMEA (Eastern Europe, Middle East and Africa). Replacing Anand will be Chandramouli Venkatesan, who comes in as managing director of the company effective January 2015.

 

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