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Orkla enters India’s confectionery market in collaboration with MTR Foods

LiveMint logoLiveMint 22-08-2017 Deepti Govind

Bengaluru: Norway’s Orkla ASA is entering the Indian confectionery market with its fruit-based jelly brand Laban in collaboration with MTR Foods Pvt. Ltd, top executives at both firms said on Tuesday.

Laban will be the first full-fledged launch for Orkla, the parent firm of MTR, in India with the Norwegian firm only having test-marketed a couple of products before.

In preparation for the launch of Laban, MTR has invested Rs40 crore in developing a production line at its Bengaluru manufacturing facility. The firm will spend Rs30-35 crore more on building the brand over the next three to five years, MTR chief executive Sanjay Sharma said at a press conference on Tuesday.

The Rs8,200 crore Indian confectionery market is estimated to be growing at 7% on an year-on-year basis, Orkla and MTR said, adding that there is huge potential in the market to tap into.

Soft and chewy candies, including jellies, account for Rs400 crore of the wider confectionery market and are developing very fast, both firms said.

“The candy market is interesting in India and a growing market. We haven’t yet decided what is to come next. The priority now is to do the Laban launch as well as we can and penetrate the market with Laban,” Atle Vidar-Nagel Johanssen, Orkla’s foods division CEO said in an interview.

Laban will be available in a couple of weeks at all general and modern trade outlets across India and will be priced at Rs10 for a 26gm pack and Rs30 for a 65gm pack.

MTR-Orkla’s Laban will compete against other soft, chewy candies such as ITC Ltd’s Candyman confectionery brand and European firm Perfetti Van Melle’s Alpenliebe jellies.

“Earlier our perspective was only about building MTR brand. Today we are taking a step forward by bringing an Orkla brand into India, localizing it and seeing how we can grow. We believe it’s a big opportunity and if it develops well it will be a very interesting extension or a growth path that Orkla and MTR could follow in India,” MTR’s Sharma said in an interview.

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