Britannia rejigs global sourcing to trim costs

Leading Indian cookiesmaker Britannia is consolidating its global procurement operations to trim costs and capture synergies offered by a reformed tax environment that recognises a uniform producer levy.
“After GST issues have settled down, we are leveraging backend synergies with the consolidation,” company VP (supply chain) Vinay Singh said. The dedicated manufacturing facility in Gujarat, which the company said was its first move towards setting up exports-only operations, will cost the cookies-maker Rs 155 crore. It will service global markets including the US, Africa and South East Asian countries.

“For exports, the cost savings are substantial. We plan to take learnings from the new facility to existing manufacturing bases,” Singh said.

The plant will produce cookies, biscuits and rusk, among other products. The company, which makes Good Day and Tiger biscuits, has 75 manufacturing facilities, including 35 contract manufacturing units.

On Tuesday, it reported a net profit increase of 24.8% to Rs 263.2 crore for the quarter ended March 31, 2018, while earnings before interest, tax, depreciation and amortisation (EBITDA) rose 29% year-on-year to Rs 397.1crore.

Almost all consumer facing companies have been reporting strong numbers for the March quarter, aided by improved sentiment in rural and urban markets, accelerated consumer promotions, new launches and increasing stability in GST-related trade and distribution issues.