Reports emerged Friday that CG Foods India Pvt Ltd, the maker of Wai Wai instant noodles in India and Nepal is looking to acquire an FMCG company with a good distribution network in west and south India. The company will raise nearly half the money from debt, especially bank borrowings, and the rest from internal accruals for funding expansion plans and proposed acquisitions.
CG Foods that sells FMCG products in India and Nepal across the categories of confectioneries, beverages, mineral water, snacks and noodles, was incorporated in 2002 by Singapore-based Cinnovation Group.
The CG brands sells products under the brand names of Wai Wai (noodles), Kwiks (snacks), Mama Bhujia (snacks), Zoom wafers (confectionaries) and Rio (beverages). Wai Wai brand has a 70 per cent market share in North East, Sikkim and West Bengal, while on an all-India basis the market share is 15 per cent.
CG Foods’ Indian turnover is Rs.150 Cr and has a global turnover of Rs.350 Crore.
CG Foods is expanding its facility by setting up a another manufacturing unit in Rudrapur at an initial investment of Rs.20 Cr, in addition to its already two functional manufacturing plants in Assam & Sikkim with a combined capacity of 270 million packs. The new plant will have a production capacity of 120 million packs.
The company has planned to invest Rs.100 Cr for business expansion over the next three years. Last year, it sold 250 million packs in India. Its distribution reach extends to 1.4 lakh outlets and is planning to double this number by 2014.
Some other players in the instant noodles space include Nestle’s Maggi, Hindustan Unilever’s Knorr Soupy Noodles, GlaxoSmithKline’s Horlicks Foodles, Capital Good’s Ching’s Secret and Smith & Jones, Future Group’s Tasty Treat, Nissin Food’s Top Ramen and Aditya Birla Retail’s Feasters. ITC is planning to enter this market with – Sunfeast Yippee-instant noodles brand.
With over 45 companies and 40 brands in 30 countries, Cinnovation Group has interests in sectors like FMCG (food & beverage), electronics & home appliances, real estate, education, financial services, infrastructure, tourism and hospitality and is expanding into power, cement, biotech, steel and entertainment.
The Cinnovation Group has the technical tie – up with Chaudhary Group of Nepal, a noodle production firm with presence in the South East Asia region.