New Delhi: India, which has emerged as the fastest growing market for US-based chocolate and confectionary maker Hershey Co., can be the hub for exports and product incubation, if the government changes duty structure on imports and exports, said Steven Clay Schiller, president (international).
Schiller, who attended a closed-door round table with the Prime Minister Narendra Modi on Friday as part of the World Food India 2017 event in New Delhi, has also raised this concern in his address to the Prime Minister.
“India is a great place to make it a hub. And, we want to export from India as well as import to India. But the current duty structure is a barrier. The policies need to change," Schiller said.
“Duty on exports should be zero, or there should be duty-free two-way trade arrangements," said the Hershey president, adding the company could start with exporting to West Asia and India’s neighbouring countries.
Lately, the business climate in India has become smoother, and the country is “outpacing" some of the other markets, said Schiller.
Hershey has also lined up a $50-million investment over the next five years in India where it has been present for the past 10 years. “Most of our investments will be in brand building. We have a pipeline ready for the future. We’ll strengthen offering in the existing brands and will launch new brands," Schiller said, declining to name the new brands that the company is considering to launch.
At present, Hershey has a multi-category portfolio in India, including brands like Hershey’s Syrups, Hershey’s Milk Booster, Hershey’s Spreads, Hershey’s Milk Shakes, Jolly Rancher, Brookside Chocolates, Jumpin, Nutrine and Smart Cook.
On 30 October, the Pennsylvania-based company, in its third-quarter results, said its net sales in India grew 16% (on constant currency terms) making it the company’s fastest growing market, while its sales in Brazil grew 3.3% and Mexico by 10%. “In 2018, we’ll focus more on strengthening distribution as we are increasing the pace of our expansion in India," Schiller said.
He said the company will add 10% more to its staff strength, both direct and indirect. At present, it has 700 people under its direct payroll in India.
Hershey currently has one manufacturing unit in India and it has co-production arrangements with local third-party manufacturers.
India’s chocolate confectionary market is projected to grow at 8% annually between 2016 and 2021 to reach Rs16,200 crore (on constant value) from Rs11,256 crore in 2016, supported by better retailing across rural areas, according to a study by consulting firm Euromonitor International.