Kraft Foods, the world’s second largest food company belonging to the Altria Group, is bullish on India and has plans to focus on the urban Indian consumer by launching durable packaged foods.
Ajit Sahgal, general manager, Philip Morris Services India SA, who is in charge of Indian operations, said that Kraft has entered India through the open general license (OGL). The company had obtained the FIPB approval way back in August 1996. Currently, the multinational is studying the Indian market, looking at the mainstream products and economies of scale.
Dinyar Devitre, senior VP and CFO, Altria Group, said that it is never too late to enter the consumer products business in any market, as long as one ensures that innovation keeps one ahead of the rest.
Mr Devitre, who is of Indian origin and an alumni of IIM-Ahmedabad, added that he has special attachment to this country and would take up the issue of better FDI norms to the higher levels with the governments of both, India and USA.
Kraft Foods has a strong presence in the US and also in western Europe, Latin America and China. Its revenues for 2002 amounted to US$ 30 billion, while it posted a profit of $ 3.4 billion. Its major brands include Tang, Kool-Aid, Kraft Cheese, Philadelphia Cheese, Kraft Salad Dressings, Maxwell Coffee House, Jell-O, Toblerone, Minute Rice, Post Cereals, Oreo Cookies and Ritz Crackers. The market cap of the parent Altria Group on NYSE was US$ 110 billion at the end of 2002.
The other benefit to Altria of also being in the foods business is that it may help the group in getting favourable resonses from various governments in terms of FDI in the tobacco business, including in India. As per its worldwide trend, Altria group companies enter new markets with premium products and later move down to the mass market. They are likely to stick to the tradition in India. Mr Sahgal added that the company will first try to get a toehold in the Indian market and then possibly look at ethnic Indian food products.