Direct marketing company Amway India on Wednesday started work on its manufacturing facility at Nilakottai, near Madurai.
The proposed plant for Amway’s first owned facility is expected to be up and running by mid-2015. The Rs 400-crore plant will come up on a 50-acre plot, which the company acquired from SIPCOT (State Industries Promotion Corporation of Tamil Nadu).
This is the first major investment and its own facility in India. “This will be our second manufacturing facility outside the US, the first being in China,” said William S. Pinckney, Managing Director and CEO of Amway India.
Production lines
According to him, the new facility will have nine production lines for nutrition, cosmetic and oral-care products.
The plant will have an installed capacity for 1.2 billion tablets and softgel; seven million canisters of drink mixes, 19 million tubes, jars and bottles of personal care products, and 60 million tubes of Glister toothpaste.
The direct-selling FMCG major has 140 SKUs (stock keeping units) under five product categories - personal care, home care, nutrition and wellness, cosmetics and ‘great value’ products. It currently sources all of them from seven contract manufacturers. “The new facility is meant only to create additional capacity to cater to the expanding domestic market, and Amway will continue to source products from the existing contract manufacturers too,” he said, adding that the idea is also to get better control over manufacturing of healthcare products.
The facility, constructed by Shapoorji Pallonji Construction, will generate over 475 jobs. Besides, the company may consider setting up an R&D centre in India in future, he said.
Growth rates
Amway India has been growing at a compounded annual growth rate of 20 per cent for the past five years, and it expects to grow at least by 10-15 per cent in the current year, taking the turnover to over Rs 2,500 crore.
It plans to expand its product kitty with more categories such as sports nutrients. Appliances such as water purifiers, air purifiers and cookware are also on its drawing board, Pinckney said.
To a question on recent incidents which led to his arrest and subsequent developments, he said, “It was very unfortunate and disappointing. However, thankfully, we got over them very quickly. This incident, I hope, would facilitate a legal framework for the direct selling industry in India.”
Of the four FIRs filed against Amway, three were filed in 2011. These were about losses incurred by dealing in Amway products in the year 2002. “All of them have absolutely no evidence. And, I was not issued any warrant nor was there any summons. They just asked me to come for an interrogation to Kozhikode. But Wayanad police came and arrested me,” he said. However, “we have always been and will continue to cooperate with the investigating authorities and have faith in the Indian judiciary,” he said.