Media Centre

Sri Lanka

RJ Corp set to buy PepsiCo’s Sri Lankan bottling ops Ratna Bhushan Comm U5 The Economic Times 26th January , 2010 RJ CORP, the diversified conglomerate owned by serial entrepreneur Ravi Jaipuna, is about to clinch a deal that will, in one stroke, hand it all of PepsiCo’s bottling operations in Sri Lanka and expand its global footprint further. RJ Corp is in advanced talks to buy the franchisee bottling rights of PepsiCo from Ole Springs Bottlers, the only bottler, distributor and marketer of the beverage and foods maker in the Lankan market, where Coca-Cola and local brand Elephant are also present. The deal gives RJ Corp access to the lucrative soft drink market in Sri Lanka, estimated at about Rs 1,2OO crore and growing at over 39% annually. “We expect to close the deal shortly,” said Mr Jaipuria, who had no comment on the valuation of the deal and other financial details. RJ Corp, which owns PepsiCo India’s biggest franchisee bottling business and franchisee rights for Yum Restaurant Internationals KFC and Pizza Hut restaurants, has been targeting a global spread for some time. Plans are afoot to set up dairy businesses in Rwanda by the year-end and in Tanzania by mid-2010 through buyouts or Greenfield ventures. The company has had a long relation with PepsiCo; it is the cola makers top franchisee bottler in India and owns the franchisee rights in Nepal and Africa too. RJ bought PepsiCo’s bottling West Bengal operations last year, the first time a company plant went to a bottler, and a controlling stake in Pepsis Guwahati-based franchisee bottler, North East Pure Drinks, in 2008. PepsiCo, whose Sri Lanka operations fall under the Indian offshoot, had entered the island nation in 1986 by roping in state-owned Ceylon Cold Storage Co as franchisee. The association lasted only till 1988-89 after PepsiCo ended the deal blaming weak bottling operations.PepsiCo soon signed an exclusive bottling agreement with Ole, owned by Capital Maharaja Organization, a private sector conglomerate with interests in pharmaceuticals, shipping, chemicals, entertainment and IT. To read More click here’&pageid=1&mydateHid=26-01-2010 Africa RJ Corp charts mega plans to venture into virgin Africa

0 6 Jan 2010, 0123 hrs IST, Ratna Bhushan, ET Bureau



RJ Corp, the diversified conglomerate owned by serial entrepreneur Ravi Jaipuria, is looking to expand in the unexplored, high-potential African market with plans to amass $180-200 million from the food and beverages business this year. The company, which owns PepsiCo India’s biggest franchisee bottling business and also holds franchisee rights for KFC and Pizza Hut restaurants, plans to set up dairy businesses in Rwanda by the year-end and in Tanzania by mid-2010 through buyouts or Greenfield ventures. In beverages, RJ Corp plans to establish three Greenfield plants this year-in Zambia by April-May,and one each in Zimbabwe and Malawi by the year-end. The company has a plant in Mozambique, which has been operational since early last year, and owns franchisee bottling rights in the other three countries. Africa has been largely untapped by Indian companies, though they have been making a late scramble for a market that promises extraordinary growth. The past 2-3 years have seen a spate of Indian consumer products companies, such as Dabur, Marico and Godrej Consumer Products, making a beeline for Africa. For these companies, the unexplored African territories offer high growth rates, though on a smaller base, as global presence there is negligible. Initial costs involve brand-building and distribution, but once those are in place, the returns are high, say industry watchers. “We may tap private equity funds or venture capitalists to raise funds for our global expansion, but most of it is being funded internally,” Mr Jaipuria told ET. He said the group’s existing dairy business in Uganda is “very profitable”, which gives the group enough resouroes to fund a large part of the global expansion internally. Mr Jaipuria did not give details on the investments for the expansion drive. The African expansion will be besides the group’s India growth plans. The group is amid setting up its own branded restaurant chains across the country and food outlets at airports. In India, the group has diversified into businesses like ice-creams, education, real estate, hotels and beer sales through an InBev JV. It also owns franchisee rights of coffee chain Costa Coffee and Walt Disney group company Disney Artist. RJ Corp expects a turnover of Rs 3,000 crore through its India operations this year. The company’s renewed focus on Africa comes ahead of the initial public offering that the company plans to float in the next two-three years. RJ Corp already has dairy businesses in Uganda and Kenya, which sell packaged milk, yogurt, butter, milk powder and processed cheese. While the Ugandan dairy business under the name Fresh Dairy was set up four years back, the Kenya operations were kicked off last year when the group acquired a controlling stake in a dairy called Daima. The company has also plans for KFC and Pizza Hut in Africa, for which it has acquired franchisee rights in the key markets there. The first KFC outlet in Nigeria’s Lagos was set up last month. Mr Jaipuria said the company will set up S0 KFC stores in Nigeria over the next three years.“We expect a turnover of $30-35 million by 2010 from these KFC stores,” he said.Here too, the company may be helped by the virgin territory that is Africa. KFC happens to be the first international food chain that has come up in Nigeria.