homebusiness Newscompanies NewsVarun Beverages Africa market share can triple in 2 3 years, says management
Varun Beverages Africa market share can triple in 2-3 years, says management
For India, Jaipuria sees business continuing to grow in double digits with 22-23% margins.
Varun Beverages can triple its market share in Africa in the next two to three years, said Ravi Kant Jaipuria, Chairman of PepsiCo's largest franchise bottler, in an interaction with CNBC-TV18 on Thursday, December 21. On Tuesday, December 19, the firm announced its decision to buy The Beverage Company Ltd, South Africa, and its wholly-owned subsidiaries, collectively known as 'Bevco', for ₹1,320 crore.
"Wherever we have taken a new country or a new territory, we've been successful in growing the market share. Right now, against our main competitor, I think Pepsi's share is only 2-3%. So there's very little downside. There's only upside, and I believe that it should triple or quadruple. This market share should not be a real challenge in the coming years," said Jaipuria.
The management also sees an earnings before interest, taxes, depreciation, and amortization (EBITDA) addition of ₹250 crore in 2024 in the Africa business.
"South Africa business is about ₹1,600 crore top line at the moment within that 12% EBITDA, and we expect it to grow at a reasonably fast pace there. So I would say it'll add about ₹200–250 crore additional to the EBITDA margins for the India business," Jaipuria added.
For India, Jaipuria sees business continuing to grow in double digits with 22-23% margins. Varun Beverages has acquired the territories—east, west, and south—where the penetration of Pepsi is low, he further added.
On capacity addition, Jaipuria said, "Fortunately, this year we will have reasonably higher capacity also because in 2022, we ran out of capacity. So we have more than 45% capacity, which has been added for the year 2024."
Varun Beverages Management also said that the capex can yield an additional ₹2,800 crore in revenue next year and closer to that in 2025 as well.
"Sting is still going quite strong," said Jaipuria, while adding that the carbonated energy drink will become 15% of the mix. The company has also added two dairy plants where it can make Tropicana, which will give it growth and higher value penetration.
For more, watch the accompanying video
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(Edited by : Ajay Vaishnav)
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