For Parrys, it's bitter sweet

NEW DELHI: After coming up for a short breath last year, Parrys Confectionery is again drowning into the red this year. The company, which had made a small profit of Rs 70 lakh in year ended March 2002, has already made losses of Rs 171 lakh in the first six months. The year is likely to end in red.
The Rs 100-crore company had first slipped into losses in 1999-00.An excise duty hike that year, followed by an MRP-related excise the year after and intense competition from multinationals pulled the once-profitable Parrys Confectionery deep into losses.
So, is the Rs 4200-crore group looking to get out of the confectionery business? MV Subbiah, director, Murugappa group, said: "If the price is right, anything is for sale." However, NC Venugopal, managing director, Parrys Confectionery, said the company is working hard for a turnaround.
The company has recently launched two new candies, Mints and Fruits; entered into an exclusive marketing and distribution tie-up with Chupachup, the Spanish confectionery giant and is rolling out some of its products; is going into the C & D class towns and is into serious cost-cutting to revive itself, says Venugopal.
The company, which has brands like Coffee Bite, Madras Cafe, Lactoking and Coconut Punch, had created huge capacities in the mid-90s. It had invested Rs 70 crore between 1993-96 to take capacity from 8,000 tonnes to 35,000 tonnes in the hopes of a demand boom.
Money was poured into the business, based on the much-touted McKinsey food report, says Venugopal.
The demand, of course, did not pick up. To top that, MNCs with deep pockets entered the market. Plus, Parrys had problems with stabilising some of its products.