Varun Beverages Ltd, part of the RJ Corp group, a diversified business conglomerate with interests in beverages, quick-service restaurants, dairy and healthcare, is the second largest franchisee in th
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e world (outside US) of carbonated soft drinks ('CSDs') and non-carbonated beverages ('NCBs') sold under trademarks owned by PepsiCo. The company produces and distributes a wide range of CSDs, as well as a large selection of NCBs, including packaged drinking water.
The Company has presence in 27 States and 7 Union Territories in India and 5 other countries across the world viz. Nepal, Sri Lanka, Morocco, Zambia & Zimbabwe. Further, It is is having 37 manufacturing facilities, of which 31 are in India and 6 in International Geographies with more than 2,500 owned vehicles, more than 2,000 primary distributors and more than 100 depots.
PepsiCo CSD brands produced and sold by the company include Pepsi, Diet Pepsi, Seven-Up, Mirinda Orange, Mirinda Lemon, Mountain Dew, Seven-Up Nimbooz Masala Soda, Evervess Soda, Sting and Gatorade. PepsiCo NCB brands produced and sold by the company include Tropicana (100%, Essentials & Delight), Tropicana Slice, Tropicana Frutz, Seven-Up Nimbooz and Quaker Oat Milk as well as packaged drinking water under the brand Aquafina. In addition, the company has also been granted the franchise for Ole brand of PepsiCo products in Sri Lanka.
The company has been associated with PepsiCo since the 1990s and over two and half decades consolidated its business association with PepsiCo, increasing the number of PepsiCo licensed territories and sub-territories covered by the company, producing and distributing a wider range of PepsiCo beverages, introducing various SKUs in the company's portfolio, and expanding the company's distribution network. As of March 2018, the company has been granted franchises for various PepsiCo products spread across 21 States and two Union Territories in India. The company's share of PepsiCo beverages volume sales ,based on sales to end customers, increased from 26.46% in Fiscal 2011 to ~51% in Fiscal 2018. Although, India is the company's largest market, the company has also been granted the franchise for various PepsiCo products for the territories of Nepal, Sri Lanka, Morocco, Zambia and Zimbabwe.
As of March 2018, the company has 20 manufacturing plants in India and five production facilities in the international geographies (one each in Nepal, Sri Lanka, Morocco, Zambia and Zimbabwe). In addition, the company has set up backward integration facilities for production of preforms, crowns, corrugated boxes, plastic crates and shrink-wrap films in certain of the company's production facilities to ensure operational efficiencies and quality standards.
The company's Promoter and Chairman Mr. Ravi Kant Jaipuria has an established reputation as an entrepreneur and business leader and is the only Indian to receive PepsiCo's International Bottler of the Year award, which was awarded in 1997.
The company was incorporated as Varun Beverages Limited on 16 June 1995 at New Delhi as a public limited company under the Companies Act, 1956. The company obtained a certificate of commencement of business on 4 July 1995. The company started its operations at Jaipur in 1996. In 1999, the company started operations at Alwar, Jodhpur and Kosi.
Devyani Beverages Limited was merged with Varun Beverages pursuant to the order of High Court of Delhi dated 6 October 2004. Varun Beverages (International) Limited was merged with Varun Beverages pursuant to the order of High Court of Delhi dated 12 March 2013. In 2013, Varun Beverages acquired the business of manufacturing and marketing of soft drink beverages and syrup mix in Delhi, India.
In 2015, through a business transfer agreement Varun Beverages acquired PepsiCo India's business of manufacturing, marketing, selling and distributing soft drink beverages and syrup mix in the Indian states of Uttar Pradesh (excluding certain territories), Uttarakhand, Himachal Pradesh, Haryana (excluding certain territories) and the Union Territory of Chandigarh. During the year, the company through a business transfer agreement acquired PepsiCo India's business of manufacturing, marketing, selling and distributing soft drink beverages and syrup mix in Bazpur, Jainpur, Satharia and Panipat. During the year, the company acquired the business of selling and distribution of soft drinks beverages and syrup mix in one district undertaking situated in Punjab.
In 2016, Varun Beverages acquired entire shareholding of Arctic International Private Limited in Varun Beverages Mozambique, Limitada. During the year, the company acquired entire shareholding of Arctic International Private Limited in Varun Beverages (Zambia) Limited. During the year, Varun Beverages acquired 85% shareholding of Varun Beverages (Zimbabwe) (Private) Limited (VBZPL).
Varun Beverages came out with an initial public offer (IPO) during the period from 26 October 2016 to 28 October 2016. The IPO was a combination of fresh issue of 1.5 crore shares and offer for sale of 1 crore shares from the promoters. The IPO was priced at Rs 445 per share. The company's shares were listed on the bourses on 8 November 2016.
On 23 February 2017, Varun Beverages announced that it has increased its stake in its Zambia subsidiary, Varun Beverages (Zambia) Limited, to 90% from 60%. VBL has been successfully running the Zambia operations since its acquisition in 2016. The increase in stake reflects the company's confidence in the future growth prospects of the subsidiary and will be an effective catalyst to drive further business growth in a fast-growing emerging market.
On 9 March 2017, Varun Beverages Limited (VBL) announced that it has divested 41% stake in its Mozambique subsidiary, Varun Beverages Mozambique Limitada. The divestment of the stake is in view of limited opportunity to scale-up operations which would have enabled the company to turnaround the loss making subsidiary. VBL continues to hold a residual stake of 10% in the unit.
On 4 May 2017, Varun Beverages announced that the company has set up a new unit for manufacturing of Pepsi range of products at District Hardoi, Uttar Pradesh and the commercial production/operation has started with effect from 3 May2017.
On 28 September 2017, Varun Beverages announced that the company has concluded the acquisition of PepsiCo India's previously franchised territories in the state of Odisha and parts of Madhya Pradesh along with two manufacturing units at Bargarh and Bhopal (Mandideep).
On 4 January 2018, Varun Beverages announced that it has further deepened its relationship with PepsiCo by entering into a strategic partnership for the larger Tropicana portfolio along with Gatorade and Quaker Value-Added Dairy in territories across North and East India. This is part of VBL's strategy to expand its product portfolio through its valued relationship with PepsiCo.
On 11 January 2018, Varun Beverages announced that it has concluded the acquisition of PepsiCo India's previously franchised rights for the state of Chhattisgarh. The Board of Directors of Varun Beverages at its meeting held on 17 January 2018 considered and approved to acquire franchisee rights for PepsiCo India's previously franchised sub-territory in the State of Bihar. Varun Beverages' subsidiary Varun Beverages (Zimbabwe) (Private) started Commercial Production at a Greenfield facility for Pepsico's products with effect from 16 February 2018.
On 23 March 2018, Varun Beverages announced that it has concluded the acquisition of PepsiCo India's previously franchised sub territory in the State of Jharkhand along with one manufacturing unit at Jamshedpur. The company is now a franchisee for PepsiCo products across 21 States and 2 Union Territories of India.
On 5 April 2018, Varun Beverages announced its plans to set-up a greenfield production facility (subject to receipt of necessary approvals) to create in-house production capacity at Pathankot district of Punjab for Tropicana fruit juices, Quaker Oats Milk based Beverages and Gatorade. Spread over ~41 acres, it will be the first fully backward integrated facility in India to manufacture the complete range of above products including carbonated soft drinks (CSD) at a single location. The expansion is to take advantage of the growing demand of Juice Based beverages for health conscious consumers.
On 3 May 2018, Varun Beverages informed the stock exchanges that a new unit at Nawalparasi District in Napal, under Varun Beverages (Nepal) Private Limited, a wholly owned subsidiary of the company, started commercial production with effect from 2 May 2018.
The Board of Directors in their meeting held on February 18, 2019 approved, its intent to enter into a binding agreement with PepsiCo India Holdings Private Limited to acquire franchise rights in South and West regions o f India from PepsiCo for a national bottling, sales and distribution footprint in 7 States and 5 Union Territories.
In May 2019, the Company acquired franchise rights in South and West regions from PepsiCo for a national bottling, sales and distribution footprint in 7 States and 5 Union Territories of India. It acquired franchise rights in the states of Gujarat, Telangana, Kerala, Tamil Nadu and parts of Maharashtra, Karnataka, Andhra Pradesh and in Union Territories of Daman & Diu, Dadra & Nagar Haveli, Andaman & Nicobar Islands, and Lakshadweep and Puducherry, except Yanam. In February 2019, it acquired territorial rights from SMV Group for parts of Maharashtra (14 districts), Karnataka (13 districts) and Madhya Pradesh (3 districts). The Company acquired an additional 20% stake in Lunarmech Technologies Private Limited during the year, which makes and sells PET bottle caps and crown caps, increasing their shareholding to 55% of the effective equity share capital. Post-acquisition, Company holds 55% of the effective equity share capital of Lunarmech. Subsequently, Company acquired control of Angelica Technologies Private Limited by appointment of majority of Directors on the Board of Angelica. Post acquisition of control, both Angelica and Lunarmech (in which Angelica holds 74% equity share capital) became subsidiaries of the Company. Additionally, it acquired two production facilities, one at Dharwad, Karnataka for a total consideration of Rs. 747.25 million; and the second at Tirunelveli, Tamil Nadu for a total consideration of Rs. 200 million. Apart from these, it launched 3 new variants of ambient temperature value-added dairy beverages, Belgian Choco Shake, Cold Coffee and Mango Shake in 200ml PET bottle, with a 180-day shelf life during year 2019-20.
As of December 31, 2021, the Company had 31 state-of-the-art manufacturing facilities in India, and 6 globally.
During the year 2021, the Company incorporated a new company namely Varun Beverages RDC SAS' in DRC to initially import finished products like carbonated and non-carbonated beverages from Morocco and Zambia and distribute them in DRC to test and establish the market before setting up a manufacturing facility locally in due course of time. A new plant for manufacturing of carbonated soft
drinks, juice based drinks and packaged drinking water in Bihar was set up to improve its market presence and gain a foothold in the territory. Apart from this, a new plant was set up for manufacturing of plastic preforms and plastic closures in Jammu & Kashmir to further strengthen its backward integration.
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