Britannia Industries Ltd is planning to invest between ₹150 crore and ₹200 crore over the next two years.

According to Varun Berry, Managing Director, Britannia Industries, investments would mostly be into expansion of capacities, product innovation and the setting up an innovation centre.

The company is planning to set up an innovation centre at Bangalore, at an estimated cost of ₹20 crore-₹30 crore. The innovation centre will become operational over the next 18 months.

“Investments would mostly be in capital expenditure, technology and innovation,” he told reporters during a press conference.

The Wadia Group-controlled enterprise operates mainly in the biscuit-rusk-cake (BCR) and dairy segments. It is the second largest biscuit-maker in India, after Parle Products.

Berry says the company hopes to enhance its own manufacturing capacities by approximately 10 pet cent every year (or 7,000 tonnes a year). The company has an annual capacity of 74,000 tonnes a month, of which 46 per cent is in-house manufacturing and, the remaining 54 per cent is outsourced.

Going forward, Britannia expects to reduce its dependence on contract manufacturing by having its own production facilities in place.

In-house manufacturing is expected to rise to 60 per cent in the coming days. As part of this initiative, a third manufacturing line is being added to its unit at Gujarat to increase capacity.

Sources indicate that the decision to opt for expanding captive capacity is intended to reduce costs in the long-term.

“It has been our strategy to look for long-term capacities, optimise costs, put up large scale plants in the right places…. Over the next two-to-three-year period we would look to have a 60-40 ratio in terms of own-to-contract manufacturing,” Berry said, adding that the company is currently looking to consolidate its presence in the BCR and dairy segments.

Dropping daily breads According to Berry, the company will soon “take a call” on its loss-making daily bread business. The daily bread business reported a loss of approximately ₹2 crore last fiscal and a turnover of ₹20 crore.

“We are thinking of what to do... The daily bread business does not fit into our long-term plans,” he added.

The company will also revisit its SAARC strategy in the coming days. Bangladesh, which bears similarity with the Eastern region, is one such country that Britannia may explore. “We would like to review our SAARC strategy as we go forward…..We may look at Bangladesh but there are no immediate plans to go there,” Berry said. Britannia had earlier made a foray into Sri Lanka, but exited the country about two years ago following losses.

Profits up 25% in Q1 Britannia reported a 25 per cent growth in profits for the June quarter on higher sales. Net profits for the quarter stood at ₹107.81 crore against a net of ₹86.29 crore in the corresponding quarter last year.

Sales revenues for the quarter were up 15 per cent at ₹1,634.23 crore against ₹1,416.3 crore in the corresponding last quarter.

On a consolidated basis, the net profit growth was 27 per cent at ₹113.66 crore against corresponding last quarter’s ₹89.49 crore. Consolidated income was higher 15 per cent at ₹1,786.99 crore against ₹1,551.51 crore in the corresponding quarter

Britannia’s scrip ended marginally lower on the BSE at ₹1150.70 on Tuesday.