Nepalese billionaire Binod Chaudhary is looking for acquisition targets and expansion in India as his group, known for its Wai Wai noodles, plans to expand footprint in Asia’s third-largest economy.
CG Foods, part of the CG Corp Global, is scouting for deals in the packaged foods segment to strengthen its foothold in the Indian market, Varun Chaudhary, managing director at CG Corp Global, told BloombergQuint. He said the consumer goods unit is also targeting new categories like sauces and instant pasta—both with a market size of Rs 200-250 crore each.
The diversified group, with interests in consumer goods, biotech, cement, electronics, appliances, and financial services, is one of the top three players in India’s instant noodles market. Chaudhary claims it’s the second-largest instant noodle maker in India with 25% share after Nestle India Ltd.‘s Maggi. But according to a executive at an industry-monitoring agency who didn’t want to be identified since the data is private, it ranks third after ITC Ltd.’s Sunfeast in the second spot.
CG Foods is focused on segments that have a higher salience in modern trade and e-commerce, he said. It targets to increase its revenue from Rs 1,000 crore to Rs 1,500 crore in FY22. And the Nepalese food company plans to launch more products at higher prices focused on modern trade and e-commerce.
That comes when the pandemic has caused a decline in footfalls. But CG Corp wants to double the share of revenue from hypermarkets, supermarkets and e-commerce from the existing 7-8% to 15% in the next one year. The organised channel will be a significant contributor to future growth, Chaudhary said.
Still, lower-priced packs (Re 1 to Rs 5) contribute 55% of the revenue, with 15% coming from its Re 1 bhujia, a crispy snack. And while the company has launched higher-priced stock keeping units, it plans to keep new product prices below Rs 100 a pack.
CG Foods, with a bigger presence in northeast and eastern India, isn’t focusing on the rest of the country, and north India in particular. The consumer goods maker earmarked Rs 200 crore to build new capacities in Uttar Pradesh and West Bengal. The focus on Uttar Pradesh and surrounding states is higher.
“One can’t discount the fact that it has a huge population, and our growth rates are picking up in UP and surrounding states,” Chaudhary said.
CG Foods launched six types of sauces and Wai Wai X-press cheese & tomato pasta. “We further plan to introduce our very own seasoning for cooking purposes, followed by ginger garlic paste and affordable packets of Schezwan sauce,” said Chaudhary. The maker of Wai Wai has also launched spicier flavours to cater to different geographies.
An initial public offering is a long-term plan, Chaudhary said as it will give the debt-free company an option to raise cash to buyout companies in the foods space. “We’re already looking at M&A opportunities. But post IPO, obviously it’s something which will help us to look at much larger companies to take on and buyout.”