Cadbury buyout to help Kraft expand presence in developing markets

Kraft Foods' acquisition of Cadbury will help it to expand its presence in developing markets, including India, by leveraging the infrastructure the British candy-maker has set up in these territories

Kraft Foods on Wednesday said its proposed $19.60-billion acquisition of Cadbury will help the company expand its presence in the developing markets, including India, by leveraging the infrastructure the British candy-maker has set up in these markets, reports PTI.

“One of the single biggest opportunities the company gets from buying Cadbury is that it enables us to fill out geographical white spaces and put our portfolio of products through Cadbury's infrastructure in markets like India,” Kraft’s chief executive Irene Rosenfeld said.

Yesterday, the Illinois-based company had sealed a deal to buy Cadbury for about $19.60 billion (£11.9 billion), ending months of bitter wrangling over the price.

"Together, we will have over 40 brands with revenues of over $100 million," Ms Rosenfeld said, adding the buyout would help Kraft to expand its footprint in developing markets, capitalise on population growth trends and provide scale to invest in infrastructure in key geographies.

The percentage of Kraft's net revenue from developing markets will also increase from 20% to 25% when combined with Cadbury, she said. "From Kraft Foods' perspective, Cadbury gives us meaningful entry into India," she added.

The deal would enhance Kraft's long-term revenue growth from 4% to over 5%. The company, which makes Oreo cookies and Velveeta cheese, expects the deal to close in mid-February.

Through the deal, which would create the world's biggest confectioner, both the companies seek to have leading positions in Brazil, Russia, India, China and Mexico.

"Kraft Foods and Cadbury have highly complementary geographic footprints," Ms Rosenfeld said.

Importantly, a combination would increase scale for both companies in markets where the two do not have significant presence, she said.

The combined group would also benefit from an improved position across Europe, including France and Spain.

The company said its strategy going forward would be to focus on becoming a leading snacks, confectionary and quick snacks company and to exit from the lower growth and lower margin businesses.
 

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NMDC finds traces of diamonds in Orissa, Karnataka & AP

Explorations in the three states have resulted in discovery of 41 kimberlite and 13 lamproite pipes, which are indicative of possible diamond deposits underneath

The country's largest iron ore miner NMDC Ltd and the world's leading diamond producer De Beers have found traces of diamond deposits in Orissa, Andhra Pradesh (AP) and Karnataka, reports PTI.

Surveys are also underway in these states to detect gold deposits, the government has said. It said explorations in the three states had resulted in discovery of 41 kimberlite and 13 lamproite pipes, which are indicative of possible diamond deposits underneath.

Kimberlite and lamproite are solidified volcanic magma and work as elevators to bring diamonds with other minerals to the earth's surface.

"So far, a total of 339 Reconnaissance Permits (RPs) have been issued covering an area of 4,66,556 sq km, out of which aerial surveys have been conducted in 27 RPs," an official statement by the mines ministry said.

It said that kimberlite and lamproite were discovered in Kalahandi, Nawarangpur, Nuapada and Bolangir districts of Orissa and in Kurnool, Prakasam and Anantapur districts in Andhra Pradesh. Explorations by CRA Exploration India in AP indicated discovery of several mineralised zones in Anantapur and Kurnool districts.

In Karnataka, these were discovered in Gulbarga district. The ministry said exploration permits had been given to several companies.
 

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COMMENTS

Borkar M.R.

7 years ago

On the eve of disinvestment, such news,( real/planted or may I call it - advertised,) will appear is it not an attempt to lure the investors?

Newsviewer Exclusive
Will there be water in Lodha’s ‘Aqua’ project?

Amid the raging water crisis in Mumbai, the Lodha Group claims that it will provide two swimming pools, a clubhouse with a waterfront café and 10 acres of waterscape at its ‘Aqua’ project in the city

The Lodha group is busy advertising its project ‘Lodha Aqua’, a luxurious residential project near Dahisar (a Mumbai suburb). According to an advertisement published in a newspaper, the Lodha group claims that it will provide two swimming pools, a clubhouse with a waterfront café and 10 acres of waterscape in its project. But how will the developer provide water for these facilities, in face of the 30% water cut imposed by the Brihanmumbai Municipal Corporation (BMC) since July 2009?

The ‘Lodha Aqua’ project was launched in 2007. On the first day of the launch, the group claimed that it managed to sell approximately 300 units at Rs5,850 per sq ft for a two bedroom, hall & kitchen (BHK) covering an area of 1,017 sq ft and a three BHK at Rs1,395 per sq ft (for an area of 1,395 sq ft). In December 2009, the group jacked up the price for the project to Rs6,399 per sq ft.

Earlier, the project had three towers—Pacifis, Atlantis and Artica. Now the developer has added one more tower named Antarctica. The project was supposed to have been completed by March 2009, but now according to the draft red herring prospectus filed by the Lodha group in September 2009, the project will be completed by June 2010.  

If the developer has already sold 300 units on the first day of the launch three years back, why is the company spending so much on advertising? The group is busy coming out with full-page advertisements and is booking prime advertising time on various channels to promote the project.

Moneylife contacted a Lodha spokesperson to know how the group was planning to fill the empty swimming pools and jacuzzis with water, but the company declined to comment. According to a few residents of Dahisar, Mira Road and Bhayandar (all Mumbai suburbs), they get water supply once in a day for only four hours. A few buildings in Mumbai are also hiring water tankers because of the shortage. 
 
In Mumbai, the water shortage problem started in 2001. In October 2001, BMC had made it mandatory for new buildings coming up after October 2002 to install rainwater harvesting systems to combat the water shortage.

But Lodha’s project—with all its advertised water bodies—has no water harvesting facility. BMC has also announced that it will not provide connections to new projects that require more than 2 lakh litres per day of water (at an average of 90 litres per person per day). The moot question is, when there is such an acute scarcity of water, how will the Lodha group manage to fill its much-touted swimming pools?
 

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COMMENTS

mona

3 years ago

is there any lodha resident here , actually i am planning to buy a ready possession investor's flat in lodha aqua . but my friends told me that there are hidden dance bars around that area. do u guys ever faced any trouble due to unpleasant atmosphere around ???plz reply soon as i need to make a decision

Vaibhav Kumar

6 years ago

This group has not completed a single project in time and have already launched atleast 20 projects so far. The worst builder in Mumbai... need some strict action from govt. in the custmer's interest. I will not any one to book a flat in this group as the foundation of marketing itself on false promises and many frauds.

Sachin

7 years ago

Note the followin facts:
1. Lodha Aqua will not fall under BMC limits
2. The project always had 4 wings and nothing is added on
3. There would be 660 flats in the projet on completion.

Parthasarathy

7 years ago

You guys at Moneylife are amazing. Anyone who does not agree with you and you take off the comments. That is pretty balanced and neutral reporting. Anyone would assume that there is something going wrong here. More honesty expected.

Abhishek Dutta

7 years ago

It's not new that the lodha group has been lying to its customers, I've booked a flat in Lodha Aqua in the month of April 2009 and was promised posession by the month of June 2009 initially, I've a pre sanctioned loan from LIC, The builders representative have been sending multiple claims till plaster since April 2009, in September when the evaluator from LIC visited the site he found out that the claims raised by Lodha was false and cleared payments only till slab 12, the Lodha Group again raised a claim in December till plaster, the evaluator again found this to be a false claim and did not clear the entire claim raised by the builder. on top of this the lodha group has been forcing me to pay an extra interest charge on the balance amount not cleared by LIC housing finance for around INR 80000/-because LIC is not clearing the payments citing false claims from the builder's end. A cheque from the LIC housing finance after the new claim has been ready since more than two weeks now but the lodha group refuses to recieve the cheque until I pay the interest charges levied on me forcefully.

Mandar

7 years ago

Pallabika,

Not sure if your analysis could be trusted. Firstly, the project is under Bhayandar and Mira-Road Municipal Cooperation and hence don't think is related to BMC. Secondly, the project has five sources of water. At least, that is what the Lodha Group promised to their customers. The 5 sources of water are:-
1. Rain Water Harvesting
2. Recycled Water
3. Borewell
4. Mineral water in Kitchen Through Tap
5. Municipal Water supply

REPLY

bhawna rajput

In Reply to Mandar 5 years ago

lodha aqua is indeed one of the biggest cheats in the business of contruction....i have purchased a flat at lodha aqua artic a in 2008 and the possesion was due in may 2010 as told by the lodha executives....but some how the dates just kept delaying further and further and till now waiting for possesions..but they do one thing very effeciently taking interest on amount but no compensation from their side....putting up banner for one project taking money from customers but introducing 4-5 more new projects...and delaying projects unneccesarily.......

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