Orkla ASA merges MTR, Eastern, and International Business to create Orkla India

The Norwegian industrial investment giant Orkla ASA has merged its three Indian businesses into one. These business units are MTR, Eastern, and International Business (IB).

Orkla has been wanting to make a grand transition from a consumer goods company to a large-scale investment company.

Among the 12 different companies under Orkla ASA, Orkla India is the 6th largest one. The global contribution of Orkla India amounts to up to 4% of its total revenue. This strategic change is expected to make operations more efficient and take advantage of shared resources.

MTR and Eastern are the consumer-facing brands, and they will maintain the same identity after the merger. This consolidation will focus more on improving back-end and central functions.

MTR is a hundred-year-old brand that focuses on the vegetarian food market. Through this merger, the company will focus on expanding its presence in the south Indian states of Karnataka and Andhra Pradesh.

Eastern is a 40-year-old company and has made a strong base in the masala market. The company will try to branch out into a broader food category.

The International Business unit will now cater to global consumers rather than just Indian consumers.

“MTR is expected to contribute about 45% of the total business, Eastern 37%, and international businesses about 18%. This consolidation recognizes the international potential of MTR and Eastern, which is why we are forming an international business unit”, said Sanjay Sharma, CEO of Orkla India.

Orkla entered the Indian market 16 years ago, and it bought a 67.8% stake in Eastern in 2021.

Sanjay Sharma further stated that both MTR and Eastern are of similar size.

Orkla India is committed to growing its business in India through both organic and inorganic means. To grow organically, the company plans to expand into the ready-to-eat sweets category. Orkla has invested Rs. 10 crore to build a 30,000-square-foot MTR RTE Sweets factory in Tumkur.

The main focus will still remain on spices and masala when it comes to inorganic business opportunities. Over the past three years, Orkla has invested a total of Rs. 100 crore and has an annual capital expenditure (CAPEX) of Rs. 25–30 crore across all its businesses.

As part of an additional restructuring initiative, Sanjay Sharma, who currently serves as the CEO of MTR, will assume the role of CEO for Orkla India. In this capacity, he will have direct oversight of the three distinct business units, each under the leadership of an independent CEO, all of whom will report directly to him.