United spirit ltd
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Transcript of United spirit ltd
BY: Nidhi Raghav
UNITED SPIRITS LTD.U.S.L. the RS. 5500 spirits arm of multi –
billion dollar UB group.
U.S.L. is the largest spirits company in India.
U.S.L. as global foot print with exports of 20 countries.
A company is known to be an innovator in the industry and has several firsts to its credit such as the first premixed GIN the first TETRAPACK in the spirits industry in India and the first single malt manufactured in ASIA.
PRODUCT MARKET
East - zone
North - zone
South - zone
West - zone
INDIA
PLANING OF INDUSTRY
TALOJA M.I.D.C. PLANT
United Spirits has a well established manufacturing and distribution footprint comprising of 37 owned manufacturing units, 57 contract manufacturing tie-ups and distribution
Production Plants At: Ludhiana Alwar Aurangabad Kalyani Goa Hyderabad Chennai VizagMangloreTaloja
Outsourcing Contract Units
• Ghaziabad• Lucknow • Guwahati • Aligarh • Patna • Sikkim
• network covering almost 98% of the sales channel in India.
USL Products Are Distributed Across 64000 Retail Outlets In India.
UB Group Has Total Of 60% Of Manufacturing Capacity Of Spirits In India.
Total production capacity 3,00,000 HL.
Supply And Demand.
112.2 million bottles
• The Industry has registered a steady 4-5% volume growth over the past five years. • Rising disposable income levels• Up-gradation from country liquor. • Increasing proportion of India’s young population
entering the drinking age• Increasing acceptance within the social circles.
Materials
Materials for production of Beer Materials for production of Whiskey
Materials for production of BrandyMaterials for production of Rum
Materials for production of Vodka
Raw materials
Water Malt Yeast Hops
Raw materials for vodka or whiskey
Process
Malting
storing
Fermentation
Distillation
Warehouse
The Indian Market
Re-distribution structure –
• Government market (65%) –State government is the sole
distributor
• Auction market (16%) – State government auctions geographical
territories which has led to monopolies / cartels
• Free market (19%) – Through trade licenses
• Bargaining power in the distribution network is commanded by
players with premium brands, large volume base and product
range
The UB Group enjoys a unique advantage as theLeader in both Spirits and Beer Segments
Particulars Total Number Comments
Brands 140 19 of these are millionaire brands and there are about 151 brand variants
SKU’s 2992 Distillery-State-Brand-Pack combinations
Distillery/Bottling Plants 79 30 Owned Manufacturing facilities;49 contract manufacturing units
Depots 48 Break-bulk points for finished goods distribution
Retail Outlets 64000 Inclusive of both on and off premise outlets
Supply chain
United Spirits has a well established manufacturing and distribution footprint
comprising of 37 owned manufacturing units
57 contract manufacturing tie-ups
Distribution network covering almost 98% of the sales channel in India
Inventories
Placement of orders with Local Manufacturers and Import Suppliers of
IMFS/ other drinks
ISSUE OF INDENTS
Placement of orders with Local Manufacturers and Import Suppliers of IMFS/BEER.
• Weighted average sale per day is arrived by = Total no. of sales/ no. of working days for last 3 months• The monthly order for other drinks and IMFS = weighted avg. sales per day * 39 days and = weighted avg. sales per day *52 days
ISSUE OF INDENTSOn 1st of every month the order is placed with all the local manufacturers
and import suppliers and indent is regulated in order to have 15 days stock
Ensures that the brand does not go out of stock at any point of time
Day to day indents are issued based on the previous day sale
This statement shows the depots which have NIL stock, 1-3 days stock, 4-7 days stock, 8-10 days stock, 11-14 days stock and 15-21 days stock for
particular brand and for a particular pack size.
Based on the statements, indents are being issued to the suppliers on a daily basis
Efficiencies
Efficiency depends on = Demand / manufactured unit
Also it depends on packaging how much we safeguard the product so
that it reaches its destination safely .
Capital Structure
As of March 2013 (Rs. In Millions)
Ratios:
Debt Equity Ratio = 0.69 (Total Debt / Total Equity)Industry Average = 1.25
Current Ratio = 0.72 (Current Assets / Current Liabilities)Industry Average = 1.30
Interest Cover = 1.74 ( PBIT / Interest)Industry Average = 4.14
Earning Per Share = 24.53 (Market Price / No. of Shareholders Outstanding)
(Rs. In Millions)Net Sales = 85851 – March 2013 75805 – March 2012
Increase/ Decrease in Stock
2%
Raw Materials Consumed
41%
Power & Fuel1%
Employee Cost6%
Other Manuf. Expenses
26%
General & Admin.
Expenses5%
Selling & Distribution
Expenses17%
Misc. Expenses1%
Increase/Decrease in Stock 1704.76
Raw Materials Consumed 30641.69
Power & Fuel Cost 348.40
Employee Cost 4717.92
Other Manufacturing Expenses 19611.94
General and Administration Expenses 3989.19
Selling and Distribution Expenses 12733.02
Miscellaneous Expenses 1015.78
Expenses Capitalised 0
Total Expenditure 74762.70
Expense Schedule
Brands
Whisky / Whiskey Brands• McDowell No. 1 family (whisk(e)y, brandy and rum)• Signature• Royal Challenge• Antiquity• Bagpiper• Director’s Special Whisk(e)y
Scotch Brands• Black Dog• Whyte & Mackay• Jura• Dalmore
Raw MaterialsMajor ingredients used in production of spirits are:• Barley : Imported from Scotland for some brands in whisky• Other grains : Imported from Scotland for some brands in whisky• Molasses : Used in production of Indian Whisky• Hops : Procured from India• Yeast : Procured from India
Scotch Whiskeys like Jura, Dalmore etc. are imported from Scotland and bottled in Indian bottling plant.
Major areas of Scotland : Cambeltown, Highland, Lowland
COMPETITORS
Pernod Ricard SA
Diageo Plc
Bacardi limited
CATEGORY MARKET SHARE
Premium scotch 44%
Regular scotch 6%
Premium whisky 60%
Prestige whisky 61%
Regular whisky 55%
Premium vodka
Prestige vodka 7%
Regular vodka 83%
Regular rum 56%
Regular Brandy 67%
Regular Gin 79%
UNITED SPIRIT CATEGORY AND THEIR MARKET SHARES
UNITED SPIRITS LTD PERFORMANCE HIGHLIGHTS
•USL brands grew 14%
•18 of the top 25 global premium brand
•USL is one of two companies with more than 10 brands featuring in the top 100 brands listing
LOCATION•India: 60% market share
•20 countries in Asia, the Middle East, and Africa
•The company operates facilities in the US, New Zealand, Canada and Italy.
•kingfisher is sold in over 52 countries
VALUE CHAIN
RAW MATERIAL
MANUFACTURING
SEGREGATION
RECIVING
AGING
BOTTELING
DISTRIBUTION
TECHNOLOGY USED
SAP SOFTWARE
DISTRIBUTION CHANNEL
UNITED SPIRIT
DISTRIBUTOR
SHOPS
SALES PERSON
Cruise ships Big parties Hotels (4 star & 5 star)Retail shops
TARGET MARKET
PRODUCTS OF UNITED SPIRITS
SCOTCH WHISKYBLACK DOG
WINEBouvet Ladubay
INDIAN WHISKYAntiquity
BRANDYMcDowell's VSOP