Having entered consumer goods business with a dedicated food park, the Kishore Biyani-led Future Group today said it is looking to acquire a cold chain logistics company to help distribute its products.
“We have multiple temperature storages and processing facilities here. Future Logistics is looking at an acquisition of a company to help in distribution,” Biyani told a select group of reporters here, ahead of the inauguration of India Food Park here by Prime Minister Narendra Modi later today.
Biyani, however, refused to divulge the deal size which the company is looking at, but maintained that it will happen this calendar year and will be a complete acquisition.
“Snowman is there, but we also want to do work on cold chain logistics,” he said, referring to the company which just had a bumper share sale.
At the 110-acre food park located on the outskirts of Bangalore, Biyani said there are multi-temperature cold storage facilities which will handle multiple commodities like bananas, mangoes, apples and so on.
The company plans to open two more such food parks in Kharagpur in Bengal and Madhya Pradesh, he said.
Future Logistics will play a pivotal role in ensuring success of the FMCG business, Biyani said, stressing on the need and urgency of the acquisition.
He asserted that the group, which has had a difficult time in recent years, has “sufficient cash” to fund its expansion.
If need be, it may look at selling non-core assets like the publication division Amar Chitra Katha, he said, hinting that it may also sell some brands in core business.
The group has already invested Rs 200 crore for the Karnataka food park and will be investing another Rs 750 crore for the facility over the next few years.
The facility is aimed at increasing the share of the company’s own private labels across categories sold through its retail format Food Bazaar.
Biyani said revenues from food brands will be touching Rs 1,000 crore this fiscal and added with the food parks in place, they will grow manifold to Rs 20,000 crore by FY20.
Gradually, the group wants to avoid selling third-party brands at its retail outlets, he said, adding by FY20, up to 80 per cent of the products sold at the outlets will be own brands.
Speaking about the concept of the business, he said, “Do you get Indian food at modern stores? You’ve to get that right. We’ve been trying to do that for the past many years, you need scale to do that. If you don’t have front-end scale, you can’t do it.”
“The whole idea is how can we create a modern ‘rasoi’ for our front-end? Now I can prepare whatever you ask for, all raw material, ingredients, plants are there,” he added.