Reliance Consumer Products (RCPL) have acquired Ravalgaon, the confectionary that aimed at bringing ‘sweet smiles on millions of faces’ for Rs 27 crore, a regulatory filing at stock market from Ravalgaon said. The trademarks, recipes and all intellectual property rights belonging to the Ravalgaon Sugar Farm Limited are included in the deal. Ravalgaon owned nine brands – Coffee Break, Choco cream, Tutty Fruity, Mango Mood, Supreme, Pan Pasand, Laco, Cheery and Assorted Centre.
The filing disclosed that the Board of Ravalgaon has “approved the sale, transfer and assignment of the trademarks, recipes, all intellectual property rights, including all rights, interests, and protections associated therewith, relating to the Company’s sugar boiled confectionery business to Reliance Consumer Products Limited (“RCPL”), for a consideration of Rs. 27,00,00,000/- (Rupees Twenty Seven Crore).”
In the disclosure, the company said that it “has found it difficult in recent years to sustain its sugar boiled confectionery business,” as it lost its market share because of the surging competition from both the organized and unorganized players. It mentioned that its “profitability has been affected by the sustained increase in raw material, energy and labour prices, without the ability to effectively pass on the input price increases to its customers beyond the Re.1/- price point. As the age of the Company’s factory, machinery and equipment has increased, the cost of production and related wastages have also increased,” it said.
The Ravalgaon company also mentions the COVID-19 pandemic which led to the closure of schools and offices for a lengthy period of time, affecting the consumer base of the company. It added that, “being an impulse product, the absence of physical movement translated into weak demand” for the products. As part of the deal, the Ravalgaon company said that they would “continue to hold all other assets such as property, land, plant, building, equipment, machinery, etc. post completion of the Proposed Transaction.”
The acquisition is of strategic nature to the RCPL as it places itself more strongly in the Fast-Moving Consumer Goods (FMCG) sector of the country. Earlier Reliance had acquired Campa Cola which is a home-grown soft drink. Reliance had also launched an FMCG brand named ‘Independence’, which markets daily needs products in the FMCG segment.
Ravalgaon is a small village in Maharashtra, from where the company gets its name as it was the place where, the company built one of the first sugar factories of the country in the year 1933. Later, in the 1940’s, the company began manufacturing sweets and toffees. The Ravalgaon Sugar Farm Limited, is a public limited company, which has been manufacturing confectionary for over seventy years, their website says.