VVF looks for brand acquisition, tap capital mkt

MUMBAI: VVF Ltd, a Rs 800-crore company manufacturing soaps and oleochemicals, is looking for acquisition of a personal wash, skincare or processed food brand even as it mulls an initial public offer (IPO) to fuel its rapid expansion.

Under its plan to complete forward and backward linkages, the company recently acquired Colgate's Kansas plant in the US for Rs 100 crore, including upgradation expenses, and will utIlise it to manufacture its full line of cleaning products for the North American market.

"We are looking for acquisiton of a brand within the country or abroad in the personal wash, skincare or food processing segment," said, VVF Ltd Senior Vice-President Piyush Jindal.

The company aspires to be a Rs 1000-crore firm by 2008.

Though declining to share the details of the proposed acquisition, he said it would possibly be a mid-sized company to complete its value offering.

"To support growth plans and fund requirements, we are looking at an IPO in the next couple of years but it could be early if we have a compelling opportunity," Jindal added.

VVF has a range of soaps including Doy, Doycare, Aloe Vera, Shiff and Jo while it is one of the largest contract manufacturers for products like Johnson & Johnson, Savlon, Fa.

It has six manufacturing plants in India at Sion, Sewri in Mumbai, Navsari, Kutch (Gujarat), Daman and Taloja (near Mumbai) with the seventh nearing completion at Baddi in Himachal Pradesh.

"The Baddi plant should be operational by December and will added 25,000 tonnes to our manufacturing capacity, taking it to 75,000 tonne," he said. Also, it has three plants in Middle East, two in Canada and the latest in the US to meet the needs of customers of Asia, Europe, Middle East and now North America.

"We expect 12 per cent of our revenues to come from the Colgate's Kansas facility," he added.

Shortly before the Kansas acquisition, VVF acquired antiperpirant and deodorant market Teo Corp at Ontario, Canada.

"The Teo Corp completes our range of products which include sopas, liquid soaps and other personal care products. The plant should become operational by April this year," Jindal said.

With rapid growth in the retail market, the sales have doubled, Jindal said. With Kansas and Ontario facilities, the company would tap the hospitality market, serving major hotel chains with soaps, shampoos and related produts.