The Competition Commission of India(CCI) approved the acquisition of dairy business of Reliance Retail Limited by Heritage Foods Limited. In 2016, Heritage Foods executed a binding agreement to acquire the dairy business of Reliance Retail, a subsidiary of Reliance Industries Limited through slump sale.
Reliance dairy business operates a pan-India dairy procurement, processing and distribution platform under two brands namely Dairy Life and Dairy Pure. The current procurement of Reliance is at around 2lakh litres per day and this acquisition will add 20 percent to existing procurement of Heritage.
Heritage Foods which is in its 25th year of existence has its core market in South India. It has some presence in Maharashtra and recently started operations in Delhi NCR. The business started by the Chief Minister Chandrababu Naidu is trying to make inroads into the North and West Indian markets through Reliance Dairy.
Eighty percent of the revenue for Heritage Foods comes from South India, and is one of the biggest players in the Telugu states. The Executive Director Nara Brahamani envisions Heritage to become a pan India player in the Dairy industry.
In FY16, the company has made 560 crores revenues. Heritage has sold it retail segment which is in losses to Future Retail and which is awaiting final approvals from CCI. It will be an all-equity transaction, wherein Heritage will then hold about 3.65 percent of Future Retail Limited
The company which works a lot with farmers is planning to bringing in International players. The joint venture with the European companies is for the Heritage fresh section to bring in specialised products which are a logical extension to the company’s products that can be used in Indian markets. In addition, Heritage will be taking their help in marketing and technology.
Brahamani who is optimistic about business growth, envisages the company to become 6000 crore by 2022. Also, they aim to increase the contribution of value added products to their overall revenues which is about 24 percent now to 40percent by 2020.
The Heritage Group under its flagship company Heritage Foods runs six business divisions — dairy, retail, Agri, bakery, renewable energy and vetCa with an annual turnover of Rs 2380.58 crores in financial year 2015-16