The Hindu Business Line : Deepak Roy to buy out Polychem's IMFL brands

THE Deepak Roy-managed Triumph Distillers & Vintners (TDV) is set to buyout the Indian-Made Foreign (IMFL) brands belonging to the Kilachands of Polychem Ltd. The brands on the transaction table are Alcazar Vodka, Mens Club Whisky and Louis XI Brandy. TDV may close the deal by this month end.

Mr Deepak Roy, President & Managing Director of TDV, told Business Line that a decision was taken "to buy out the brands following the promise shown by them, especially Alcazar Vodka, in the market place". The transaction has not yet happened but is expected to go through shortly, Mr Roy added. Currently, TDV - in which UB group holds 85 per cent stake and the remaining in the hands of Mr Roy — has the marketing rights of these Polychem brands. The deal size was not known.

The Kilachand Group was the erstwhile joint venture partner of United Distillers & Vintners (UDV) in India, which was headed by Mr Roy before scripting a management buy out of the IMFL business of the multinational. In 2002, UDV, part of Diageo Plc, put its local whiskies under the Gilbey's range on the block in order to focus on international brands such as Smirnoff, Johnnie Walker and J&B.

TDV took over the business, primarily driven by Gilbey's Green Label Whisky, and soon offered a substantial majority stake to the UB group. Not part of UB's existing spirits business, TDV is an independent entity with Mr Roy directly reporting to Mr Mallya.

Mr Roy's decision to buy Polychem's brands comes at a time when the repackaged Alcazar Vodka - positioned as the `Electric Spirit' - has been reporting brisk growth. "Alcazar reported 70 per cent growth in 2003-04," Mr Roy said. The brand now has annual sales of just under a lakh cases, up from 35,000 when TDV took over the marketing. TDV and Mr Roy expect Alcazar to grow 50 per cent in the current financial year. Following the takeover, analysts believe the company would make Men's Club Whisky a serious player in the economy segment, while Louis XI Brandy could strengthen its presence in the southern markets.

Meanwhile, TDV closed 2003-04 with sales of 2.8 million cases meeting the projection made earlier. Its flagship brand Green Label Whisky reported 14.2 per cent jump with sales crossing 2.4 million cases. TDV expects volume sales to grow 12 per cent and has set a target of 3.1 million cases in the current financial year.

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