Amway planning second facility in India

It would help the company boost sales and increase product range, Amway India Legal and Corporate Affairs Vice-President Yoginder Singh told journalists visiting its facility here.

The company, a 100 per cent subsidiary of US-based Amway Corporation, had been witnessing a 25 per cent year-on-year growth in its revenues, he said. "If we continue to grow (in this rate), we will have a new facility. It may be in South India...", he said.

Amway Corporation through its subsidiaries has two manufacturing facilities catering to the United States market, a facility in China and the other here. Company officials said the second facility would cater to the growing south and western markets while the present facility (at Baddi) would focus on northern and eastern markets.

For setting up the present manufacturing facility, the company has inked an agreement with Baddi-based vendor Sarvotham Care Ltd. About 85 per cent of the company's products are manufactured by Sarvotham Care Ltd, Singh said.

Noting that the company in March 2010 had made an additonal investment of Rs 55 crore in the facility here, taking the total investment since 2005 to Rs 105 crore, Singh said it had been able to tripe production at the plant, with the commissioning of four more production lines.

With this, the plant has three lines in powder categories, two lines in tablets and capsule, two lines in liquid category and two lines in creams and toothpaste, Sarvotham Care Ltd Assistant Vice-President Sajan Kiran said.

Amway India currently offers over 115 products in five categories including nutrion and wellness (29), personal care (14), home care (14), cosmetics (52) and great value products (6).

Stating that nutrition and wellness products contributed over 50 per cent of the company's revenues, Singh said they would further expand this division by introducing new products catering to youth and old age segments.

"We will be adding new products under nutrition (and wellness) may be in two years...," he said. The company would also launch 'category advertising', Amway India Head-Corporate Communications (South zone) Rajat Banarji said.

"This is mainly to increase awareness.. initially, we may do it by beginning on Amway (as a brand) and then may extend to the products offered by us", he said. On their financial performance, Singh said they were able to register an increase of 25 per cent year-on-year on their revenues.

"In 2008 the company reported revenues of Rs 1,128 crore and in 2009 we reported Rs 1,407 crore an increase of 25 per cent... In the first eight months of this year itself, we have registered revenues of Rs 1,100 crore.. We hope to reach Rs 1,700 crore by year end", he said.

The company has ambitious plans of reporting Rs 2,500 crore turnover by 2012, he said. According to him, Southern region contributes about 27 per cent of their total revenues. The company currently has about 5.5 lakh distributors, 130 offices and 55 warehouses across India.

It had planned to increase the brand store from the current 10 to 25 over the next two years. Singh said the Indian direct selling industry was Rs 3,330 crore market. Amway Corporation reported revenues of USD 8.4 billion in 2009. It has presence in 88 countries.