Date:28/02/2008 URL: http://www.thehindu.com/2008/02/28/stories/2008022850911800.htm

Business

CavinKare acquires MAA Fruits

Staff Correspondent

Enterprise value assessed at Rs. 30 crore including debts

Plans to set up another unit
To introduce line extensions

C. K. Ranganathan

CHENNAI: The Chennai-based, CavinKare Pvt. Ltd., has acquired MAA Fruits, a soft drink manufacturer located at Dharmapuri in Tamil Nadu.

MAA Fruits, after due diligence, was assessed at an enterprise value of Rs. 30 crore (including debts).

Addressing a press conference here on Wednesday, C. K. Ranganathan, Chairman and Managing Director, CavinKare, said MAA Fruits had a strong raw material procurement system, skilled employee base and its own manufacturing unit at Dharmapuri. After the acquisition, CavinKare planned to set up another facility in the same location, he said.

CavinKare had decided to take the MAA fruit drinks across regions. At present, the product was available in the South. Mr. Ranganathan said CavinKare would use the logistics, manufacturing and distribution expertise of the company to grow the business to higher levels. It would also introduce line extensions.

At present, MAA is available in flavours such as mango, pineapple, apple and pink guava. Sales for 2007-08 are expected to reach Rs. 40 crore. However, the challenge before the company lies in improvising the packaging, distribution, sourcing, merchandising and logistics, he said.

Stating the reasons for entering into juice market, Ramesh Vishwanathan, Executive Director, said the organised market was now at one-fourth of the total potential market size. The market had a healthy growth rate on an expanding volume base and the fruit drinks market in South India was currently growing at 50 per cent.