Reliance Industries will give its Rs 11,500-crore fast-moving consumer goods (FMCG) consumer business a big push as it forays into new spaces which can drive growth.
RIL is looking to seize what it describes as a “high-growth opportunity” in India’s Rs 2-lakh-crore consumer market, which is growing at 8% annually. Rural consumers, who number nearly 900 million, are driving 65% of FMCG growth, Reliance Retail director Isha Ambani said on Friday at the company’s 48th annual general meeting (AGM). Meanwhile, India’s 350-million middle class households are gravitating towards premium products and experiences at affordable prices. This combination of a rising middle class and accelerating rural adoption marked an “unmissable consumption opportunity”, she said, for the rationale to press the FMCG accelerator button.
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One part of its strategic bet is a spin-off of the consumer business, housed under Reliance Consumer Products (RCPL), part of Reliance Retail, into a direct subsidiary of RIL, she said. The aim is to ensure dedicated and sharp focus on products, markets and customers, she added, with a target to hit a revenue `1 lakh crore in five years. The move to separate FMCG from retail, Isha said, would also ensure faster execution, innovation and deeper operational focus, critical to winning in the marketplace.
Bold new structure and ambitious growth targets
The company will also work to expand FMCG distribution, manufacturing and innovation and aims to invest Rs 40,000 crore in the next three years. AI-driven food parks will be built, set to be among the largest in Asia, led by robotics and sustainable technologies and securing cost leadership. The company is also taking its consumer products business overseas, expanding into West Asia, Sri Lanka, Nepal and West Africa. The plan is to enter at least 25 countries in the next 12 months, Isha said, building an “Indian consumer brands powerhouse” with global reach.
“Our long-term ambition is to become India’s largest FMCG company with a global presence. This will make RCPL a big value-creating engine for the Reliance Group, comparable to our retail business in size and profitability,” she said. RCPL counts Campa Cola and Independence and a host of other acquired & in-house brands in categories ranging from food and beverages to home and personal care and daily essentials in its portfolio.
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