Orpat to enter snack foods

Snacks make good business sense. Pepsico earns Rs900 crore a year from them and will invest $200 million dollars on expansion over the next three to four years. Now clock and lamp maker Orpat plans to enter the snack foods market, reports CNBC-TV18.

The Orpat group is the world's largest clock maker, India's top vitrified tile maker and number one carbon fluoroscent lamps manufacturer. But Orpat wants more. It is eyeing the Rs2,000 crore namkeen and wafer market, which is dominated by over 1,000 small fries and 25 big ones such as PepsiCo's Frito Lay.

"We think that whenever we enter a product, we target being number one and God-willing we would be there" says Jaysukh Patel, MD, Orpat.

In over two to three years it will set up 40 to 50 factories, two in each state. That's far more than market leader PepsiCo's three plants, which supply about 45 per cent of the market. Orpat sees strength in numbers, large volumes and low prices as essential ingredients in its recipe for success.

That's how it reached leadership positions in other sectors in remarkably short timeframes. So it seems that big is in and small is out.

"Earlier there weren't any big players but only smaller players. Today they are only 50 per cent and they are getting wiped out at a rate of 5 per cent every year," says Chandubhai Virani, managing director, Balaji Wafers.

Virani believes small players will account for just 10 per cent of the market. But Orpat is not saying much. It's hatching crunchy plans and believes it can serve up another success. But, of course, the market will decide that.