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United Biscuits buys manufacturing facility of HP firm

United Biscuits, the world’s third largest biscuit maker, is making its Indian foray by taking over the manufacturing facility of a little-known Himachal Pradesh (HP) firm, according to a media report. The UK-based makers of McVitie’s, Hoola Hoops and Jacob’s Cream Crackers brands is buying the facility of SS Food Industries (SSFI) that makes biscuits for exports to Africa and the Middle East, a person with direct knowledge of the development said.

McVitie’s, a digestive biscuit made of wheat and high fibre, occupies a distinct ‘health’ positioning. It is expected to compete with Britannia’s Marie Gold and NutriChoice and Sunfeast Marie Lite.

The $1.6-billion United Biscuits (UB) is expected to launch its flagship brand in India in the first quarter next year. The company’s Indian operations is headed by Jayant Kapre who was earlier with confectionery company Wrigley and beverage maker PepsiCo India.

United Biscuits has been scouting for a possible manufacturing or distribution alliance in India for more than a year and the acquisition of SSFI’s plant marks its entry into the Rs 6,000-crore Indian biscuits market dominated by Britannia and Parle.

To begin with, it is not considering an outright financial investment in any company in India. As of now, the plant in HP will make brands like McVitie’s in India, it is learnt.

Biscuits is an intensely competitive segment in India. Apart from the three national players — Parle, Britannia and ITC (that makes the Sunfeast brand) — the category has strong regional brands such as Priyagold, Cremica and Dukes.

United Biscuits, founded in 1948 following the merger of Scottish family businesses McVitie & Price and MacFarlane Lang, is now jointly owned by global private investment firm BlackStone and European private equity firm PAI.

In global markets, marketing and sales of United Biscuits and snacks is managed by group division United Biscuits International (UBI). By and large, UB has tapped global markets either through direct representation or by entering into distributor tie-ups.

In May this year, it mandated global IT services and technology company Genpact for a seven-year contract to provide multiple finance and accounting services for United Biscuits.
Source: Images Food

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