New Delhi: Norwegian investment company Orkla ASA announced the reorganization of its India operations. It will be operating under one entity Orkla India, that focuses on packaged spices and convenience foods markets.
Orkla entered India in 2007 by acquiring MTR. In 2020, it picked up a majority stake of 67.8% in Kerala-based spice maker Eastern Condiments.
After the reorganization, Orkla India will have three business units: MTR, Eastern, and the international business. MTR specializes in pickles, spices, and ready-to-eat meals, while Eastern focuses on plain and blended spices.
As a part of this reorganization, Sanjay Sharma, the erstwhile chief executive of MTR has been appointed as the CEO of Orkla India. Sharma will be responsible for overseeing the operations of all three business units with each having its own independent CEO, who will be reporting to Sharma.
Additionally, Sunay Bhasin has been appointed as CEO of MTR, while Eastern will continue to have Navas Meeran at its helm. Meeran a is member of the original promoter family of Eastern. The international business will be run by Aswin Subramanian.
In an interview, Sharma said the firm will focus on expanding the existing brands across the neighbouring south Indian states. “Our intention is to build local brands.”
MTR has been historically strong in Karnataka, and Eastern has a massive presence in Kerala. However, the brands have also launched products suited for Andhra Pradesh and Tamil Nadu, besides 18% of its annual sales are from exports.
As part of the restructuring, MTR and Eastern will maintain their independent brand identities, the company said.
“Our acquisition of Eastern has significantly scaled our business in India reaffirming our position in this market …The three business units will play a pivotal role in fortifying Orkla’s portfolio which believes in the strength of local brands and leadership within distinct markets,” Atle Vidar Nagel Johansen, chairman, Orkla India, said.
The reorganization comes after Orkla globally established a new business model with 12 independent portfolio firms in March. The firms have greater autonomy, responsibility and decision-making authority ensuring optimal utilization of the potential of each firm, he said.
Orkla ASA is positioned as an industrial investment company that focuses on building consumer-facing companies. Orkla India is now the sixth largest portfolio firm for the Norwegian parent, contributing an estimated 4% to its annual business. In 2011, Orkla India also bought ready-to-use spice maker Rasoi Magic, that is a 100% subsidiary of MTR.
As part of the 2020 Eastern Condiments deal, Orkla had said that Eastern will merge with MTR.
“Now the merger is complete and the scale of the business is suddenly very big. We are close to ₹2,200 crore, in terms of size. We’ve been working on transformation and integration of Eastern into our business,” he said.
India’s branded spices market is set to touch ₹50,000 crore by 2025. Branded spices will make up half of the spices sold in the country, according to a 2021 paper by investment bank Avendus Capital.
Sharma said parent Orkla continues to scout for acquisition opportunities in India. “We are perpetually on the lookout for more M&A opportunities. If we can build a basket of brands, it will be a good direction for us. Building scale is the next big task for us—both organically and inorganically.”
Mergers and acquisitions in the sector has gained momentum.
Download the Mint app and read premium stories
Log in to our website to save your bookmarks. It’ll just take a moment.
You are just one step away from creating your watchlist!
Oops! Looks like you have exceeded the limit to bookmark the image. Remove some to bookmark this image.
Your session has expired, please login again.
You are now subscribed to our newsletters. In case you can’t find any email from our side, please check the spam folder.
This is a subscriber only feature Subscribe Now to get daily updates on WhatsApp
Norway’s Orkla recasts India business for bigger play in spice market | Mint – Mint
Leave a comment