HVA Foods, which launched the first Initial Public Offering (IPO) for this year in Sri Lanka, plans to consolidate its HELADIV brand in countries where it has established a presence and to increase the market share through an aggressive marketing campaign set to launch soon in a bid to attract new buyers/agents in countries where representation is not significant, according to officials.
“The HELADIV brand, having been established in Russia and Ukraine will expand its reach in other CIS countries such as Kazakhstan, Belarus, Azerbaijan, Uzbekistan, Georgia, etc,” Rohan Fernando, Chairman HVA Foods told the Business Times on the sidelines of a media briefing to launch their IPO which is slated to raise some Rs 319 million.
He said 30% of the diversified tea firm is offered to the public at Rs 15 a share and the proceeds of the IPO will go (Rs. 45 million) to buy 100% rights of the HELADIV brand to HVA Foods Ltd, from its parent HVA Holdings.
He explained that the brand, which has been valued at US$ 1.24 million, is registered in 42 countries and this acquisition will give HVA Foods total jurisdiction over the brand globally. He also noted that infringement of the brand rights in any foreign country where the brand is registered will also now come under the control of HVA Foods Limited. “Some Rs. 95 million will decrease the gearing of HVA and Rs. 102 million for the upgrade of HVA’s iced tea plant,” he said, adding that the remaining monies will finance the incremental working capital including retirement of the expensive short term borrowing.
Mr. Fernando said that the company aims to increase its market share by as much as 25% year on year in the Russian region. He also added that HVA will be focusing on the Indian mass market which will have positive results for Heladiv brand in the near future.
He said that the company envisions having offices in strategic markets. “In order to fulfill tea requirements from other origins, the company has already initiated a programme for joint ventures in India, Indonesia and Vietnam. In the next few years these strategic partnerships will be enhanced to undertake marketing in multi origin teas,” he added, noting that their Strategy will be focused primarily to project the goodness of tea from other origins in the specialty range such as the Darjeeling’s from India, Keemun’s from China, J`panese Sencha etc.