Mayank Jalan: Sweet tooth

Calcutta, Oct. 11: Homegrown Keventer Agro has snapped up a 50 per cent stake in confectionery maker Candico.

The enterprise value of the deal has been estimated at Rs 100 crore. The definitive agreement was signed today.

According to the broad contours of the deal, Mayank Jalan, managing director of Keventer, has been appointed joint managing director of Candico. Sanjeev Kumar, the promoter of the confectioner, will remain chairman and managing director.

Sources said many leading food and confectionery makers were in the fray for the Nagpur-based company, which created the brand mint-.

“Yes, the deal is done. We have been selected. I am happy with the outcome. We are now co-promoters in the company to take it to next level,” Jalan said while confirming the deal late in the evening. Kumar could not be contacted for comment.

Candico is present in three segments — gum, candy and hard-boiled toffee. It has brands such as Loco Poco, Koffi Toffi and Time Bomb.

Incorporated in 1997, the company created highly successful brands such as mint-, which was later sold to ITC. It used to be one of the top three players a few years back before sales declined rapidly because of a financial crunch.

Jalan said his target was to achieve a turnover of Rs 300 crore for the company over the next three years. While he declined to give the present sales figure, sources estimated it to be Rs 55-60 crore compared with Rs 150 crore earlier.

“Candico has a state-of-the art manufacturing and research & development wing, while Keventer has the requisite sales and distribution network. It is a marriage of strengths,” Jalan said.

The Nagpur factory is strategically located for a pan-India reach that Candico used to enjoy earlier. Candico is said to have 1,800 distributors, but the number has now dropped to less than 400.

Jalan is aware of the challenges ahead. “It has all the potential. I have to spend a lot of management time going forward.”

Keventer will first cash in on the huge brand recall Candico has by stepping up promotion and advertising. The next step will be to revive the sales and marketing network. In the third stage, the company will try to expand capacity to 30,000 tonnes per annum from 24,000 tonnes.

Apart from its own products, Candico also manufactures for companies such ITC.

It is learnt that the next generation of Candico’s promoter family were not keen to continue the business. The Kumars did, however, look more at a partnership than the money from the sale.

Keventer shelled out less than what some other competitors were ready to pay. However, it was selected as the Calcutta company wanted to continue with the existing promoter and grow the business.

The deal will give Keventer, a Rs 1,200-crore entity headed by Mahendra K. Jalan, a national presence and help it to create a big brand. The company is well known in eastern India, especially Bengal, where it created ice cream brand Metro, giving tough competition to multinational Kwality Walls. It has also launched mustard oil brand Utsav.