Norwegian branded consumer goods major Orkla ASA is looking for strategic acquisitions in India to expand its presence and tap opportunities emerging in the processed food products segment, a senior company official said Tuesday.
“We are in search for acquisitions in India that are strategically fit to expand our presence in a buoyant economy and cater to the modern consumers looking for a variety of branded processed foods,” Paul Jordahl, Orkla Brand International chief executive, told IANS on the margins of an event.
The $9-billion, 350-year-old Nordic group forayed into India in 2007 by acquiring the Bangalore-based MTR Foods for $80 million (Rs.364 crore/3.64 billion) from the promoters (Maiya family) and has drawn plans to go national over the next two-three years.
“We are in India for a long term. We do not intend to go fast but step-by-step. Besides funding MTR for a pan-India presence, we will leverage the MTR brand to expand our product portfolio to offer consumers a variety of processed foods,” Jordahl said.
Orkla Brands operates on the basis of a multi-local model where responsibility for value creation in the core business rests at the local level with each individual entity.
With four synergistic units – Orkla Foods Nordic, Orkla Brands Nordic, Orkla Brands International and Orkla Food Ingredients, the group subsidiary is evaluating the Indian food processing industry for a variety of products that cater to diverse consumer needs and meet the changing tastes of the generation next.
“We see a lot of potential for processed food brands across India, especially in metros and cities where packaged or ready-to-eat products are in great demand from the up-market consumers and a growing middle class, which is hard-pressed for time to cook or serve guests faster,” Jordhal noted.
The company commissioned a study of the Indian consumers’ traditional and changing food habits, lifestyles and cuisine choices to meet their taste buds.
“With the Indian economy bouncing back and disposable incomes rising, we want to replicate the success we had in other countries where the multi-billion dollar processed food brands flourish by offering a variety of products from breakfast to supper,” Jordhal said.
Noting that the study was to gain an insight into customer and consumer needs and utilise it to drive innovations, Jordhal, who is also chairman of MTR, said the use of strong branded products was key to securing consumer loyalty.
“We want to create durable value by delivering products that consumers and retailers cannot do without. Achieve growth by increasing revenues in existing business and through acquisitions and focus on cost-effectiveness across the value chain,” he said.