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May, 28 2018

Ferrero aims to double distribution network, production With Rs 500 cr investment

The company is now aiming to further penetrate into tier II and III cities by doubling its distribution network over the next 2-3 years.

Italian confectionery major and premium chocolate maker, Ferrero Will invest additional Rs 500 crore to take its total investment to Rs 2,000 crore in India to further its production facility and distribution network, a senior company official said.

"India is an important market because the potential is very big. Today, it is relatively small but the idea is that India would grow many folds. The ambitions are big. The idea is to multiply our turnover of today and it would take some time," Ferrero India Managing Director Stefano Pelle.

The company is now planning to enter into tier II and III cities by doubling its distribution network over the next 2-3 years.

brands like Ferrero Rocher, Kinder, Tic Tac and Nutella operated by Ferrero is considering to get into the affordable segment in the sugar confectionery with value-based offerings and small SKUs (stock keeping units) in chocolate side.

Once, Ferrero has right kind of portfolio and have right through the market, then definitely India would be among its "three biggest priority market for us," Pelle added.

About the investment, Pelle said, "There are plans to increase it. Now we have invested already more than Rs 1,500 crore but we have plans to cross easily Rs 2,000 crore in some time to come. It could also be more depending opportunity in the market. Certainly, the group is very clear that India is a priority."

Moreover, the premium chocolate maker is also aiming the mass market by having some affordable products in its offerings.

On being asked about the strategy, Pelle said affordable "packaging would be a part of it".

Ferrero is also expanding its distribution network and plans to be available in top 100 cities soon. "One of the ambition which we have, is to double our distribution in next 2-3 years," Pelle added.

The company has a plant in Baramati catering partly to the domestic market and rest is for markets of South Asia, South East Asia and Middle East.

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