INDIA BUSINESS WORLD OCTOBER (1^st - 20^th) 2007
The Month that was ...

RADICO KHAITAN TAKES 36% IN RS 160-CR GREENFIELD DISTILLERY

India's second largest spirits marketer, Radico Khaitan, will take 36% stake in a mega greenfield distillery project in Maharashtra. Radico will be the largest shareholder in a three-way joint venture in which leading distributor and bottler, Ashok Jain-led NV Group and Riddhi Siddhi, are the other stakeholders. The greenfield JV, Radico NV Distilleries Maharashtra Ltd, will be located in Aurangabad with an installed annual capacity of 36 million litre across rectified spirit, extra neutral alcohol and ethanol. The project cost is estimated at Rs 160 crore and the venture, catering to both molasses and grain-based spirits, is expected to become operational in the next 12 months.

The other two partners, Ashok Jain and Riddhi Siddhi, will hold 32% stake each in the JV. This will be Radico's second distillery after the original facility at Rampur in Uttar Pradesh. Besides primary and secondary distillations, the Aurangabad venture will also have a bottling facility for the company's brands like 8PM Whisky, Contessa Rum, Magic Moments Vodka and Old Admiral Brandy.

"We have large facilities for distillation in Uttar Pradesh. Having facilities in another state balances the geographic spread. Both the states between themselves produce 80% of sugar cane. Our large number of contract bottling facilities located in south will be able to access spirit from this plant, resulting in large savings in freight," Lalit Khaitan, chairman and managing director, Radico Khaitan Ltd, said. Further, the new project's proximity to sea ports will help Radico's export thrust. The company has been placing emphasis on export markets in Africa, the Middle East and the UK.