Bata to soon acquire a brand to maintain growth momentum

Bata to soon acquire a brand to maintain growth momentum

New Delhi: Footwear maker Bata India on Thursday said it will soon acquire a shoe brand in the country aimed at maintaining the annual 15% revenue growth momentum.

“We are in talks with both domestic and international players to acquire a brand. We might acquire the brand soon," Bata India managing director Marcelo Villagran told PTI on the sidelines of a store launch at Ghaziabad.

Though Villagran did not divulge further details of the proposed acquisition, sources said that the acquisition would help Bata India to reduce its reliance on domestic outsourcing which currently stands at 30% of the total 45 million pairs footwear sells a year.

The company’s indigenous production at five manufacturing plants cater to 60% of the total sales. The remaining 10% it imports from sister companies across the globe.

Bata India has two plants in South and East each and one in North. While the Southern plants are located at Hosur and Peenya in Karnataka and Andhra Pradesh respectively, facilities in the East are based in Kolkata and Patna. It has also one manufacturing facility at Faridabad.

Asked whether Bata India would look at increasing the number of its manufacturing facilities, a company official replied in the negative, but added that it would keep on investing in the existing plants for capacity expansion and strengthening research and development (R&D).

Bata India’s topline has been growing at a compounded annual growth rate (CAGR) of 15% for the last few years. The company would be happy to maintain the momentum in the coming year as well.

During the first nine months (Jan-Sept) of the current year, Bata India had recorded 900 crore revenue vis-a-vis 800 crore in the corresponding quarter last year.

Meanwhile, Villagran said that the company plans to open up 70 retail stores in 2011 within an average investment of 50 lakh in each stores. The company has 1,200 outlets across the country now.