Hyderabad: Candico, the Rs125-crore domestic confectionery company, is going global. The company is setting up a $5-million manufacturing plant in South Africa for catering to seven countries in the South African region. Having conducted an extensive market survey and competitor analysis in this market, the company is gearing up to tap the huge potential of this market where foreign brands have so far had very low penetration.

The Johannesburg plant is Candico's second unit in Africa since the acquisition of its plant in Tanzania for $1 million in October last year. It has now ramped up the capacity in its first plant from 1,800 tonnes to 3,900 tonnes per annum and is further increasing it by 40 percent within a year.

According to Karan Gupta, executive director, Candico India, "Candico's second plant in South Africa will be followed by two more strategic acquisitions for catering to North and West African markets. We are steadily gaining a firm foothold in the global confectionery market," he said.

With its first acquisition in Africa last year Candico made its entry into the $100 billion global confectionery market, making it the only Indian multinational in the confectionery segment. The company's global expansion strategy is aimed at generating 50 per cent revenues from international operations in the next five years.

The company's international expansion plans include a combination of organic and inorganic strategies, through strategic acquisitions and mergers, joint ventures or setting up of independent manufacturing facilities in individual markets.

The company is also offering its own brands in the international market, in addition to promoting the acquired brand portfolio. The company plans to launch the Candico brand in the markets to which the company currently exports. These include Dubai, Baharain, Oman in the Middle East and Nepal, Sri Lanka and Bangladesh in the SAARC region.

While the products will be marketed under a global brand name, the flavours and packaging will be customised for each local market. The company claims to be the only company in India that manufactures all four categories of confectionery - candies, toffees, lozenges and gums.

The company says it entered into joint ventures with leading European vendors for manufacturing world class products over a decade back, when not more than a few Indian companies were exploring international partnerships. Candico has a joint venture with Eurobase (Belgium) - the only tie-up the world's largest independent gum base manufacturer has ever entered into. Candico also shares a joint venture relationship with Curt Georgi (Germany), a global leader in flavours and fragrances.

The company is following an equally aggressive domestic expansion strategy. It currently holds an eight percent share in the Rs1, 500 crore Indian confectionery industry.

Candico's portfolio of 13 brands include Loco Poco, Koffi Toffi , Gumbo Jumbo, Gol Maal and Time Bomb. The company sells about two billion units of confectionery products every year through a 1500-strong countrywide distributor network.

"We have identified specialty candy retail as one of the potential segments for future growth and are actively exploring the opportunity. Currently, the project is in the planning stage but when implemented, it will be the first of its kind initiative by any confectionery company in India," said Gupta.

Candico's integrated state-of-the-art confectionery manufacturing facility having a production capacity of 45,000 tonnes, is located at Nagpur in Maharashtra in western India, where it also undertakes contract manufacture for Indian and multinational confectionery makers.

The overseas activity is the first phase of Candico's global expansion strategy aimed at generating 50 per cent revenues from international operations in the next five years.