Danone set to double its sales in India over the next three years

Food group Danone, which has operations in Cork and Wexford, plans to double its sales in India over the next three years, a company executive said yesterday.

Danone’s products are sold on five continents, and the company has over 180 production plants and about 100,000 employees.

In 2011, Danone generated sales of €19bn, of which more than half were in emerging markets. India’s baby nutrition market is valued at about 25bn rupees (€0.35bn), in which Danone holds about an 8% share.

“India’s growth in the nutrition sector will outpace China’s growth. We are here to expand. Baby nutrition is typically the kind of category where the market grows at 15%-20% annually,” said Laurent Marcel, managing director at Danone’s India nutrition business unit.

“We should grow faster than the market. We should be able to double our business in three to four years. That is the ambition. It is a growing business.”

Earlier this year, the group acquired Indian drugmaker Wockhardt’s for about €275m. Wockhardt’s is a nutrition business that sells popular brands such as Dexolac, Farex, and Nusobee. The brands compete with Danone’s principal global rival Nestle.

Mr Marcel said the group’s holding company Nutricia expects to leverage the existing Danone and Wockhardt’s brands in India.

The sales expansion will begin once the company has developed its understanding of the local market. Mr Marcel said: “We will get our international products [into the Indian market], but at this time it is too early which products we will get.”

Danone’s new €50m plant in Macroom, Co Cork, is due to be operational in early Jan 2013. That investment will double the Cork plant’s production capacity to 70,000 tonnes of infant nutrition products annually, including brands such as Aptamil and Cow & Gate.

Earlier this year, Danone told the markets its intention to build sales in emerging economies was partly driven by a “swift deterioration in consumption” in southern Europe.

Danone also recently announced the successful launch of a €750m five-year bond issue. Danone said the funds raised will enable the company to diversify its sources of finance and extend the maturity of its debt at favourable market conditions.