Date:28/06/2004 URL: http://www.thehindubusinessline.com/2004/06/28/stories/2004062801500100.htm

Back Nestle seeks FIPB nod for pet foods

Sindhu J. Bhattacharya

New Delhi , June 27

SWISS food major Nestle SA said on Sunday it wants to introduce pet foods in India through the wholly-owned subsidiary Excelcia Foods Pvt Ltd.

It will not use the other Indian subsidiary, Nestle India, to enter this new business. Nestle SA has sought permission from the Union Government for cash and carry wholesale trading of pet food in the country.

The Swiss major's request to route the pet food business through Excelcia comes about five years after it exited the business of manufacturing and selling biscuits through Excelcia, in a joint venture with Dabur India Ltd.

And since the joint venture was dissolved, Execlcia has been doing no other business. After a long-drawn battle over valuation, Nestle SA had acquired 100 per cent stake in Excelcia from Dabur sometime in 1999; two years later, the Swiss major sold off Excelcia's plant and machinery to a local biscuit manufacturer, but retained Excelcia as a registered company.

Thus, Excelcia has no manufacturing facility of its own at present and Nestle SA has sought permission to import pet food from other manufacturing facilities worldwide and sell these in India.

When contacted, Excelcia Foods' Director, Mr Beda Rust, told Business Line that, "Excelcia Foods proposes to enter the pet food business in India by undertaking cash and carry wholesale trading. The pet food products are proposed to be imported from other Nestle affiliates. We have approached the Foreign Investment Promotion Board for approval to undertake cash and carry wholesale trading in pet foods."

While no reason was given by Nestle SA on why it did not route the pet food business through Nestle India, Mr Rust did confirm that there was no "non-compete" clause with Dabur India on entering the biscuit business once again. Also, no confirmation was available on whether Nestle India plans to enter the biscuit business.

According to the Nestle SA Web site, the Swiss company entered the pet food business in 1985 and today sells brands such as ONE, Pro Plan, Tidy Cats, Fancy Feast and Felix. However, no details were available on which brands would be imported into India. After the acquisition of Ralston Purina in 2001, Nestle SA uses both its own manufacturing facilities as well as Purina's to manufacture and export pet food to several countries it operates in. Sources said currently Nestle owns no manufacturing plant for pet food in Asia.