Rasna looks at overseas franchise arrangements for manufacturing abroad | Company News

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Rasna, which became a household name in the 80s and 90s and is still ruling the pre-mix market, is now looking at overseas franchise arrangements for manufacturing abroad.

As part of the arrangement, the franchisee would invest in the plant and machinery and it would also take care of day-to-day operations. Rasna would supply the pre-mix, technical know-how and some financial support. It would also do the quality control, marketing and distribution.

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Piruz Khambatta, Rasna Group chairman, said, “We already have 3 to 4 arrangements and we are searching for more.”

Bangladesh and Nepal are countries where such arrangements are in place.  

Negotiations for franchise agreements were on for Egypt, Indonesia and Philippines. Market size, increasing logistics cost and high duties were factors spurring such arrangements.

About 30-35 percent of Rasna’s sales come from exports and it is looking to up the share to 50 per cent over the next few years.

Rasna is available in 60 countries.

Khambatta expects the export division to clock in a 30-35 per cent year-on-year (YoY) growth in volumes in FY24. “We could have done much better but the whole year has been full of supply chain disruptions partly because of the wars and the Red Sea crisis.”

On the domestic front, the growth would be about 20 per cent. The soft drink manufacturer has roped in actress Tamannaah Bhatia as its new face.

But just like other consumer-facing companies, Rasna too is struggling to ramp up its sales in rural areas for a while now.

Khambatta said, “Last summer, rural growth didn’t pick up.” While March was “very good”, April, May and June lagged. Diwali was also a “little pale,” he said.

However, the Rasna Group chairman was bullish on the rural segment for the coming year (FY25) with the rollout of sops in an election year.

About 20-25 per cent sales of Rasna come from rural areas. Though Khambatta pointed out that people from rural parts also book orders in urban centres. Rural is a growth driver, he said.

“India is very unique; our growth propensity depends on the rural masses,” Khambatta pointed out.

Rasna has a three-pronged approach for growth. At one end it targets the masses, at the other, it competes with start-ups in the D2C space with higher margin products while exports are another growth vector.

In exports, it has qualified for the PLI scheme of the government for branding and marketing abroad.

And if the global situation improves, then Khambatta believes that there could be a 50 per cent growth in exports.

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