New Delhi: Reliance Consumer Products is in the negotiation process of acquiring majority of the shares of Udhaiyams Agro Foods, a well known Tamil Nadu food brand. Udhaiyams specialises in food on a daily basis, snack, and breakfast mixes that can be cooked ready in a few minutes. This transaction indicates that Reliance is interested in expanding rapidly in the fast-moving consumer goods (FMCG) industry and penetrate more households in India.
According to industry observers, the transaction will be medium sized, although it might aid Reliance in penetrating southern India within a short period. Udhaiyams is now competing with large companies such as Tata Consumer Products and MTR Foods, however, joining hands with reliance would provide it with a far more reach.
Reliance has already expressed the desire to have a good portfolio of food and drinks brands. Such a step may assist the company to leverage its large retail and distribution base to distribute Udhaiyams products in India. According to experts, smaller brands are not always able to target national markets, and the assistance of Reliance can make them expand more quickly.
The consumer division of the company already possesses such brands as Campa drinks, Lotus chocolates and chips. The acquisition of Udhaiyams will make Reliance more marketable in the food sector particularly in the southern states where the regional brands enjoy a massive following.
