Financial Daily from THE HINDU group of publications
Wednesday, Dec 10, 2003
Agri-Biz & Commodities - Dairy & Dairy Products
Corporate - Diversification
After cheese, Dabon now dips into ghee
New Delhi/Mumbai , Dec. 9
EVEN as its Le Bon cheese brand remains in slow growth mode and other dairy ventures failed to take off, Dabon International Pvt Ltd, a 50:50 joint venture company between Dabur India and French dairy major Bongrain SA, has made a quiet entry in the 1.5 lakh-tonne organised ghee market. The ghee has been introduced under the same name as Dabon's processed cheese brand Le Bon.
Speaking to Business Line, Mr Sumeet Anand, Dabon International's Chief Executive Officer, said Dabon is sourcing the basic product from Belgium-based dairy company, S.A. Corman. While Dabon will continue to source the ghee from S.A. Corman in the initial stages, Mr Anand indicated that the company could consider setting up an independent manufacturing unit in India for ghee, if the volumes grew. "We could either add more capacity at our existing plant in Noida, or set up a new plant for ghee. Our domestic manufacturing plans for Le Bon ghee will depend on the product's offtake," he said.
Le Bon ghee has been positioned on the health plank. The product priced at Rs 145 for a 500-ml tin claims to have 80 per cent less cholesterol than the conventional ghee. The company claims it has made use of `de-cholesterolised technology' to remove 80 per cent cholesterol from the ghee.
Le Bon ghee has been rolled out in select markets such as Maharashtra. Dabon International's presence in India is marked by processed cheese, cheese spreads and slices. The domestic processed cheese market is estimated at Rs 250 crore, led by the Gujarat Cooperative Milk Marketing Federation's Amul and followed by Britannia. Le Bon's sales are estimated at 250 tonnes.
The availability of the Le Bon brand has been restricted owing to distribution and logistics-related problems, besides inadequate cold chain infrastructure. According to industry sources, its manufacturing plant at Noida has been operating at only 15 per cent capacity.
With the exception of processed cheese, Dabon has not been able to sustain any other forays in the dairy industry. The company had introduced flavoured milk, milk-based jam spreads under the Le Bon Milky brand, and shrikhand under the Delicia brand name, three years ago. However, an inadequate cold chain infrastructure and sourcing-related problems forced the company to withdraw these products.
Meanwhile, Dabur India proposes to formally divest its stake in Dabon International in due course, since it does not fit in the company's strategy and it is a non-core business. Dabur has, in any case, not invested in Dabon since over two years.
Le Bon paneer next
AFTER ghee, Dabon International proposes to enter the branded paneer market. While Mr Sumeet Anand, Dabon International's Chief Executive Officer, declined to divulge details of the same, industry sources confirmed that paneer was next on the company's launch block.
While indicating that Dabon International is already test-marketing the paneer, sources said that the company had set itself a target of rolling out paneer later next month.
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