Mars plans $160m plant in ‘high priority’ Indian market

By Oliver Nieburg

- Last updated on GMT

Mars signs MOU with Maharashtra Government for Snicker and Galaxy plant in Pune
Mars signs MOU with Maharashtra Government for Snicker and Galaxy plant in Pune

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Mars will construct its first confectionery factory in India, producing Snickers and Galaxy.

The company this week signed a Memorandum of Understanding (MOU) with the Maharashtra Government for its ‘Mega Project’, a greenfield plant in Pune. The firm will invest Rs.1005 crores (over $160 million) in the facility, providing 200 jobs.

It comes a few years after Indian market leader Mondelēz announced a $163m plant in Andhra Pradesh due to open later this year.

‘One of the most rapidly emerging chocolate markets’

Ehab Abou-Oaf, regional president of Mars Chocolate Asia Pacific, said: “India is a high priority market for Mars….India is one of the most rapidly emerging chocolate markets in the world and we hope to capitalize on that through this manufacturing plant."

Mars currently imports confectionery products to the Indian market such as Snickers, Mars, Galaxy, Bounty and Twix. The firm has a corporate office for its chocolate segment in Gurgaon, New Delhi, but has no confectionery manufacturing capacity in the market.

MV Natarajan, general manager at Mars International India, said: “Chocolate industry in India is growing at nearly 20% every year and we see this as a huge opportunity to expand our chocolate portfolio in the country in the coming years.”

India’s chocolate market has been growing at an annual compound growth rate (CAGR) of 15% in the last three years to reach INR 52bn ($851m) in fiscal 2014. ValueNotes expects the industry will grow at CAGR of 16% over the next five years to reach INR 122bn ($2bn) by fiscal 2019.

Near bustling cities

Mars’ new site will be based in India’s seventh-most populous city, Pune, which is around a two-hour drive from the country most populous city, Mumbai.

Natarajan said: “The climate, geography, talent availability, proximity to port, therefore to raw material and the proximity to demand cluster, makes Pune one of the most viable locations for chocolate manufacturing. Our Pune plant is planned to be completely eco-friendly and a LEED GOLD certified facility.”

Mars #3 in India

Mars is India’s third largest chocolate player with a 6% share, according to Value Notes. The market is dominated by Mondelēz, which holds a 62% share due to the strength of its Cadbury brand. Nestlé is the second largest player on 18%.

In 2013, Mondelēz announced it would build a $163m plant in Andhra Pradesh​. The first stage of the four-phase project is expected midway through 2015, with final completion scheduled for 2020.

Last year, the leading industrial chocolate supplier Barry Callebaut said it was considering establishing a factory India​ –a “white spot”​ in its global manufacturing footprint.

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