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