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Purvita Chatterjee

Mumbai, Oct. 8

TO get a foothold in the regional edible oil market, the foods division of Godrej Industries Ltd (GIL) has decided to take on the local players with its region centric edible oil - Godrej Sunshakti.

To counter the regional brands such as Fortune, Gold Winner and Gemini, Godrej has introduced its Sunshakti brand in the sub premium and popular category of edible oils in Maharashtra and Karnataka.

Speaking to Business Line, Mr M.Y. Varma, Executive Vice-President, Sales and Marketing, GIL, said, ``The foods division has embarked on a new strategy to counter regional brands and get a foothold in the local market. The company is now concentrating on developing brands that are region centric. One such initiative is Godrej Sunshakti, the brand, a sub-premium and popular range of cooking oil, is expected to be launched over the next few weeks''.

Pegged at Rs 64 for a litre, Godrej Sunshakti will be manufactured by third party players who have their own refining facilities in these regional pockets, to improve the logistics for its brand.

Adds Mr Varma, ``While the rest of our edible oil brands will get manufactured at our facilities in Wadala, a region specific brand such as Sunshakti will be sub contracted keeping in mind the quality parameters stipulated by the company.''

Godrej Industries manufactures edible oils under sunflower, groundnut, soyabean and is also test marketing a blended edible oil - Godrej Sunrice.

While the local brands have enjoyed an edge over the national brands by virtue of their location, Godrej has decided to improve its logistics by going in for third party manufacturing.

According to Varma, ``The threat from local players became prominent about two years ago when the cost of logistics ate into the shares of big players such as ITC and Marico''. Having learnt its lessons from the experience of these big players, Godrej has decided to introduce third party sourcing to improve both its logistics and inventory management systems.

While it struggles to improve its margins in the edible oils business, Godrej has also become a third party sourcing agent for companies such as Coca-Cola and Cargill. ``By doing so, we are able to beat our fixed cost in the business,'' says Mr Varma, who wants to increase the operational efficiencies within his company.

In the process of reducing its losses, Godrej Industries has also decided to step into new categories such as fruit drinks under its existing Xs brand of fruit nectars. Entering the arena of brands such as Tropicana and Real, Xs range of fruit juices would comprise flavours such as orange, mixed fruit and pineapple. Godrej has decided to launch its fruit juices in 1-litre packs pegged between Rs 60-65.

Meanwhile its fruit beverage brand - Jumpin - has been suffering from distribution bottlenecks and the company has decided to focus more on institutional than retail sales. Claims Mr Varma, ``the category of fruit beverages have been declining, but we hope the volumes will improve for Jumpin.''

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