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Cadbury to hit the acquisitions trail

Reeba Zachariah

He sports a famous surname. But Cadbury India managing director Mathew Jonathan Cadbury, son of former Cadbury chairman Adrian Cadbury (of corporate governance fame), wears his name lightly.

Company staffers tend to be a bit overawed when dealing with him, he notes. Yet the name helps, he confesses, when he's dealing with proprietors of Indian companies because they think they're dealing with the owner of UK-headquartered Cadbury Schweppes. "But I'm only an employee," he laughs.

Sitting behind a less-than-expansive desk in a tiny room in Cadbury House (the chocolate, malted beverages and confectionery company's sprawling office complex in Bombay is being renovated, and is not up for sale as was once thought), Cadbury, however, doesn't take lightly the goals he's set for the company- an average annual growth rate of 20 per cent. That's almost double the 10-12 per cent rate of recent years. "If economic growth picks up by 2002, we will achieve 20 per cent turnover growth the next year," he says confidently.

To do so, the Rs 5.71 billion (in December 2000) Cadbury India could launch a flurry of new products- and will be hitting the acquisitions trail, he says guardedly, in his first interview after becoming managing director in February this year.

"We are looking at acquiring brands or companies in the sugar confectionery industry," he acknowledges.

But press him for details- for instance, is Cadbury India then in talks with the Madras-based EID Parry's Confectionery on acquiring some of its brands?- and Cadbury smiles and declines to be drawn in. He says too that the Indian company would foray into snack foods but is cagey about which ones.

Cadbury India's chocolate-based drink Bournvita is a market leader in its category, but has been taking a beating from SmithKline Beecham Consumer Healthcare's Horlicks, especially in South India, though in north and west India Bournvita is still ahead. Still, malted food drinks, which contributed 32 per cent to Cadbury India's turnover in 1994 accounted for only 24 per cent of sales in 2000. Predictably perhaps, Cadbury's new managing director does not entirely rule out the option of foraying into white drinks.

He still sees chocolates as the company's main business. Chocolates currently contribute 64 per cent to turnover, but Cadbury thinks that this could fall to under 50 per cent in five years as the company moves in a big way into snacks.

Acquisition ambitions are less than novel to the Cambridge University-educated engineer who worked at Procter & Gamble before earning an MBA from Insead in France and then joined the chocolates and soft drinks giant Cadbury headed the M&A (for emerging markets) function in the UK before shifting to India. Cadbury, 42, has visited India before.

"When I was asked whether I would be interested in looking after the Indian operations, I jumped at the opportunity," he says.

He's put in stints in Poland, Spain and Mexico. So is the Indian sojourn part of his professional journey to the chairmanship of Cadbury Schweppes? He's the fifth generation Cadbury, the UK company has had Cadburys as chairmen uninterrupted since 1967, Mathew's father Sir Adrian Cadbury retired some years ago as chairman, while uncle Dominic retired last year as chairman. Mathew Cadbury laughs: "I've no idea. Others think that I'm qualified to be chairman."

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