Biscuit-maker Britannia Industries Ltd, which owns popular brands like Good Day and Tiger, on Tuesday said it was in advanced discussions with Greek cake and confectionery major Chipita to finalise a deal for a joint venture (JV).
The two companies have already signed a non-binding memorandum of understanding (MoU) to explore certain business opportunities, the Indian company said in a stock market disclosure.
Earlier in the day, The Economic Times reported, citing Britannia's managing director Varun Berry, that the Indian company was expected to hold a majority stake in the JV that would make an initial manufacturing investment of $11 million.
The ET report added that the two companies will make rolls, croissants, and other dough products for the Indian market under the JV.
The deal is expected to be finalised in the next couple of weeks.
Chipita's products are manufactured at 17 plants in nine different countries, according to its website. It sells to consumers in 66 countries under international brands like 7DAYS, fineti and Chipicao, either directly or through strategic partnerships.
The Greek company also has JVs in two other countries. Edita Food Industries was established in 1996 as a JV in Egypt between Chipita and the Berzi family while Modern Food Industries (MFI) was set up in 2007 in Saudi Arabia as a JV between Chipita, Almarai and the Olayan Group.
This will not be the first time that Britannia will be forming a JV with a foreign firm, although such ventures have failed to live up to its expectations in the past.
In 2009, the Nusli Wadia-promoted Britannia scrapped its 13-year-old partnership with French food giant Danone, ending an intellectual property dispute over the brand Tiger. Another partnership with New Zealand-based dairy firm Fonterra, formed in 2002, also snapped the same year after Britannia bought out the foreign firm's stake.
Britannia's consolidated sale of products rose 11.2% to Rs 8,835.98 crore in financial year 2015-16 from Rs 7,944.18 crore in the previous fiscal. Net profit rose 17.1% to Rs 806.11 crore in the last fiscal from Rs 688.64 crore in the previous year.
Other major brands of the 120-year-old company include biscuit brands NutriChoice, Milk Bikis, Marie Gold, Crackers and Bourbon. Britannia, which entered the dairy business in 1997, now gets close to 10% of its revenue from the segment.
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