Ferrero aims US$296.6m investment in India to improve distribution network

INDIA – Ferrero, the Italian manufacturer of branded chocolate and confectionery products has unveiled plans to invest US$74.15 million in the sugar confectionery business to bring its total investments to close to US$297m in India.

According to an article by ET Retail, the group is considering investments with value-based offerings as part of plans to expand its production facility and distribution network.

The company plans to double its distribution network over the next 2-3 years as it expands further into tier II and III cities.

“India is an important market because the potential is very big, today, it is relatively small but the idea is that India would grow many folds.

The ambitions are big. The idea is to multiply our turnover of today and it would take some time,” Ferrero India Managing Director Stefano Pelle told PTI.

Besides, Ferrero which has brands like Ferrero Rocher, Kinder, Tic Tac and Nutella, is considering getting into the affordable segment in the sugar confectionery with value-based offerings and small SKUs in chocolate side.

Once, Ferrero has right kind of portfolio and have right through the market, then definitely India would be among its “three biggest priority market for us.”

Pelle said the company had plans to increase the investment to more than US$297m depending on the market as close to US$223 million had already been invested.

Another strategy Ferrero is taking involves offering some affordable products with affordable packaging as it takes a focus on the mass market in India.

Ferrero said it is expanding its distribution network and plans to be available in top 100 cities.

The company has a plant in Baramati, half of its production is for the domestic market and rest is for markets of South Asia, South East Asia and Middle East.

Ferrero India boasts annual sales exceeding US$222.6 million, according to Economic Times.

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