Financial Daily from THE HINDU group of publications
Wednesday, Aug 18, 2004
Financial Daily from THE HINDU group of publications Wednesday, Aug 18, 2004 |
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Corporate
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Alliances & Joint Ventures Marketing - Strategy UB inks bottling pacts in Thailand, Lanka and Pak Boby Kurian
Bangalore , Aug. 17 THE UB Spirits Division, the world's fourth largest spirits marketer by volume, has entered into bottling agreements in Thailand, Sri Lanka and Pakistan as part of a move to take its rum brands and Black Dog scotch whisky to overseas markets. This is the domestic liquor major's first significant international foray other than Nepal where it owns a distillery. UB officials said a definite pact was in place for bottling arrangements with local distilleries in these countries but refused to divulge more details including names of the overseas units. "The arrangement in Pakistan is mainly for Black Dog Scotch Whisky, while in Thailand and Sri Lanka it involves our rums as well. This is a step towards globalisation of our products," Mr Vijay Rekhi, President, UBSPD said. Incidentally, UBSPD is working on a strategy to take Indian rums global in a big way. The bottling agreement in Thailand gives UBSPD — comprising McDowell & Co and Herbertsons — a foothold in the Association of South East Asian Nations (Asean) that includes 10 countries, namely Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam. This could be the cornerstone of its much talked about strategy for entering the South-East Asian markets. In fact, UB had earlier hinted at making Singapore the hub and was in talks for co-packing arrangement with a traditional ally there. Developing a manufacturing base in Asean has its advantage since trading among the group countries attracts no duties. However, some of the Asean markets such as Singapore accepts the European Union definition of whisky, which puts Indian whiskies made from molasses out of contention, and hence UB's emphasis on rums, industry observers said. The entry into Sri Lanka comes after prolonged dithering after McDowell, in the late 1990s, had announced plans to pick up a strategic stake in one of the leading liquor companies of the island nation. It is not yet clear whether the bottling pact is a precursor to any equity tie-up. UBSPD sold over 35 million cases in 2003-04 and pipped Bacardi to emerge as the fourth largest volume player in the liquor business. It has targeted sales of 50 million cases in next three years with increased depletions from overseas markets.
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