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Tuesday, Sep 19, 2006

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MTR Foods plans sales push thru' direct consumer contact

Swetha Kannan
V.K. Varadarajan

Awaits Rothschild report for future partnerships, associations

The company has grown at about 35 per cent and owes part of that to the success of the plays and the sampling trials.


Bangalore , Sept. 18

Amid reports of sell-off of MTR Foods, the company's Chairman and Managing Director, Mr Sadananda Maiya, has denied any move towards a sale. The company, he said, has chalked out a marketing programme to expand sales through direct consumer contact.

"Why will I sell the company when it is doing well?" asked Mr Maiya. He also denied any pressure from investors to sell MTR Foods.

On reports of J.P. Morgan Chase's plans to exit the company, Mr Maiya said, "Even if it were to quit, it will not happen for another six months to one year at least."

Mr Maiya holds 40 per cent stake, while Aquarius Group holds 14 per cent and 26 per cent is held by J.P. Morgan Chase. The rest is held by family members.

The investment banking firm Rothschild, Mr Maiya said, was appointed for advice on future partnerships and associations. "Whether they will be strategic or equity partnerships, it has not yet been decided," he said.

Incidentally, MTR has been divided for convenience in operations between two cousins. While MTR Foods handles the packaged foods business, Mavalli Tiffin Rooms runs the restaurant.

Marketing initiatives

Meanwhile, for the last year or so, MTR Foods has been sponsoring magic shows and theatre performances to strengthen its brand presence in Karnataka. The company is using this platform to hold live demonstrations and dole out free samples of its products to people visiting the performances.

From October last year to March this year, 50 theatre shows have been held in various parts of the State, especially rural Karnataka. This year, the target is to hold 200 shows especially in rural North Karnataka, where the company is "not so strong."

Thrust on rural areas

Mr Maiya said the "biggest market" in the country is in the rural areas. Four contemporary `social' plays will be staged and will have references to MTR Foods in the dialogues.

Mr Maiya said the company has grown at about 35 per cent and he owes part of that to the success of the plays and the sampling trials.

Although this approach is very local, vis--vis the traditional TV campaign, Mr Maiya firmly believes in direct consumer contact.

Mr Maiya hopes to continue with this marketing initiative for another six years.

Plays will be staged for another year in Karnataka, before they move out to other States in the South. Karnataka still continues to be its stronghold with the State contributing about 40 per cent to sales. But Mr Maiya hopes to make the North count as well.

Live demonstrations of products are also held at MTR's `concept store' in Bangalore, which sells the entire portfolio of 256 products. Mr Maiya said the footfall is quite heavy, especially on weekends with over 1,000 visitors.

Besides, MTR Foods is also advertising on television. "For the next two months, there will be an advertising burst on regional and Hindi channels. The advertisement campaigns will continue till March, in short bursts of two months each," said Mr Maiya.

Exports account for 10 per cent of sales. MTR Foods is present in the US, Canada, the UK, Gulf, Singapore, Hong Kong, Japan, China, Malaysia and Thailand.

The company hopes to finish 2006-07 with a turnover of Rs 165 crore.

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