Adani Wilmar Ltd

Strategic Direction

• Adani Wilmar Ltd will strive to maintain and extend its lead in vegetable and seed oil during the forecast period, while also gaining share in cooking fats. The company will expand its distribution in North India and South India during the forecast period in an attempt to gain share in these regions. The company is also expected to focus on building up its export sales, expanding to new export destinations across Asia and the Middle East and potentially also within Europe.

Company Background

• Adani Wilmar Ltd is a joint venture between Adani Group, an international trading company, and Wilmar International Ltd of Singapore, an agri-business group and leading player in oils and fats. The company was founded in 1999, when Adani and Wilmar set up India’s first port-based oil refinery at Mundra, Gujarat.
• The company is solely focused on oils and fats.
• The company benefits from strong nationwide distribution, with 80 distribution branches and 5,000 distributors catering to a million outlets across the country. The company has representatives in almost all major cities across the country. The company has its strongest sales in West, East and Northeast India.
• The company’s main strengths are its backwards integration and supply chain management. Its refinery at Mundra is strongly focused on backward integration. The plant controls the transportation of oil through pipelines from port to the plant. It also has in-house packaging material manufacturing facilities including a blow-molding facility, corrugated box plant, tin-manufacturing facility and multi-layer packaging film plant. This integration gives Adani Wilmar Ltd an edge in offering competitively-priced products to consumers.

Production

• Adani Wilmar Ltd produces its products solely within India, although it imports its oil seed. Its main production plant is its refinery in Mundra, Gujarat, with this opened in 1999. This is one of India’s largest and most sophisticated oil refineries. The company also operates refineries at Bundi in Rajasthan, Haldia in West Bengal and Mantralayam in Andhra Pradesh. The company’s total refining capacity is over 5,000 tonnes per day.
• The company also has packaging operations at Chatral in Gujarat, Latur in Maharashtra, Jaipur in Rajasthan, Dharwad in Karnataka, Dewas in Madhya Prades and Cochin in Kerala.
• The company exports its soybean oil to around 20 countries in the Middle East, Southeast Asia and East Africa.
• The company also produces products under license for a number of international and Indian companies. The company’s sophisticated production facilities enable it to tailor production and to offer flexibility to third-party customers.

Competitive Positioning

• Adani Wilmar Ltd ranked at 11 in overall packaged food in 2007 with a value share of almost 2%. The bulk of the company’s sales are of vegetable and seed oil, where it led with 20% value share in 2007.
• The company saw its value share decline slightly in overall packaged food towards the end of the review period. This was chiefly due to oils and fats seeing slower growth than overall packaged food in the year, with the company continuing to gain share within oils and fats.
• The company is focused on maintaining its leadership in vegetable and seed oil, opting for a mainstream positioning for its products.
• The company offers a good range within vegetable and seed oil, including eight different types of oil. However, its range is limited to oils and fats.
• The company is focused on oils and fats, which is expected to see slower constant value growth than overall packaged food during the forecast period. However, within this it offers a strong range of vegetable and seed oil, with this product area expected to see a good constant value growth of 63% during the forecast period.
• The company aims for a mass positioning, seeking to attract the widest possible range of consumers. Its products are thus affordably priced in order to ensure strong volume sales.
• The company strongly promotes its Fortune soybean oil, focusing on educating Indian consumers about the health benefits of soybean oil. The company’s marketing was mainly responsible for the growing popularity of soybean oil during the review period, with this becoming one of the most popular variants in vegetable and seed oil. At the start of the review period, soybean oil was perceived as having an unpleasant odour. However, the company’s double-filtration process created odourless soybean oil.

Source:           Euromonitor International