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Big Mac adds bite to suppliers' kitty

August 10, 2006 11:16 IST

A decade of fast food chain McDonald's operations in India has turned around the companies that form a part of its sourcing network. Most of these firms have seen a sharp rise in their revenues -- in some cases, up to 100 times.

"We have been engaged with some companies as we wanted supplies of high-quality raw materials," said Vikram Bakshi, managing director, Connaught Plaza Restaurants, McDonald's franchisee for north and east India.

Amrit Foods, a division of Amrit Banaspati, which has been associated with McDonald's India as a supplier of dairy mixes, soft serve mix and milk shakes mix for over a decade, has seen its turnover increase five-fold from Rs 4 crore (Rs 40 million) to Rs 20 crore (Rs 200 million). At present, about 30 per cent of its turnover comes from McDonald's.

"We have been getting various inputs for product development at par with the international standards. McDonald's has become a reference point for us and the association has a multiplying effect on our business," said Ashwini Bajaj, managing director, Amrit Foods.

Now, the firm has state-of-the-art dairy processing equipment from Denmark, France and Sweden.

Its plant has also deployed first of its kind technology of ultra-heat treatment with direct steam infusion. It has also begun supplying flavoured milk to Mother Dairy and ice cream mix to Haldiram's.

In 1996, McDonald's chose Cremica for sourcing buns, liquid condiments, batter and breading. Cremica's turnover has grown to about Rs 200 crore (Rs 2 billion) from Rs 20 crore at the beginning of association. Cremica now also caters to Hindustan Lever, Indian Railways, the Army, Café Coffee Day, etc.

Akshay Bector, one of the promoters of the Cremica group, said, "Apart from commercial gains, the association with McDonald's gave us the opportunity to adopt modern and better practices of the food industry." Cremica now has HACCP (hazard analysis critical control points) certification on food safety for all its plants.

Vista & Kitran, supplier of chicken and the vegetable range of products for McDonald's India, has witnessed its turnover shoot up to Rs 30 crore (Rs 300 million) from about Rs 1 crore (Rs 10 million) in 1996.

Capacity-wise, it has become the largest frozen food company in the country. Apart from being an exporter to McDonald's in West Asia, it also supplies chicken products to Godrej in India. Managing Director Bhupinder Singh said because of the association with McDonald's the company had built up an elaborate supply chain and about 70 per cent of its turnover comes from it.

Radhakrishna Foodland looks after the entire back-end operation of McDonald's India -- warehousing, storage and vending. The company's turnover has increased to about Rs 250 crore (Rs 2.5 billion) from Rs 100 crore (Rs 1 billion) in 1996 and, today, it caters to companies like Amul, Hindustan Lever and Cadbury's.

Rajesh Shetty, country manager, said, "We got an exposure to the international distribution companies that were catering to McDonald's outside India and were able to replicate them in India." About 30 per cent of the company's turnover comes from McDonald's.

Ajay Modi in New Delhi