BL Agro launches new center for excellence, targets 20% growth

After setting its foot in Telangana with a cutting-edge manufacturing facility, FMCG major BL Agro Industries is continuing its expansion spree in its base city, Bareilly (Uttar Pradesh), and Bihar, India, with aggressive marketing and growth plans in sight for FY25.

The company, which sells edible oils under the ‘Bail Kolhu’ brand, is now accelerating its dairy production plans with the opening of the 'Center for Excellence for Cow Breeding and Dairy Technology' in Bareilly, and has set aside INR 50 crores as a marketing budget for the new financial year—with a minimum 20% growth target.

The new marketing budget has also seen a 20% increase from last year. However, the company has decided to stick with its agency, Leads Brand Connect, which has been given an extra mandate to work on the new initiatives and marketing strategies, pan-India.

Speaking to Campaign India on the development, Ashish Khandelwal, managing director of BL Agro, shared, “The establishment of the Center of Excellence for Cow Breeding and Dairy Technology is a differentiator for us. It will have the capacity to manage high genetic merit (HGM) Gyr breed of cows and will feature an integrated dairy farm and milk processing unit equipped to accommodate 10,000 cows. We are targeting growth of at least 20% in FY25.”

The company also wants to emphasise community participation to boost farmers' income and empowerment with this initiative.

While in its parallel efforts, the manufacturing unit in Telangana will see a focused approach on producing a wide range of food products under their brand 'Nourish'. The facility will serve as a central hub for staples such as wheat flour, pasta, vermicelli, spices, and papad (crackers). It will also play a crucial role in manufacturing rice bran and cottonseed oils to meet the diverse culinary needs of consumers in the region.

“In essence, our partnership with Telangana underscores our unwavering commitment to expansion, delivering top-notch products, and fostering socio-economic development in the region. We're eagerly anticipating the exciting opportunities ahead and look forward to a fruitful collaboration with the government and the people of Telangana,” Khandelwal said.

2023: A milestone year

Last year, BL Agro signed a memorandum of understanding (MoU) with Telangana chief minister Anumula Revanth Reddy, planning to invest INR 500 crores in the state and also, open 5,000 vacancies. It infused INR 500 crores in the agritech startup Leads Connect to create an agri-value chain in Telangana under its initiative ‘Khet Se Kitchen Tak’ (from farm to kitchen), which helps improve productivity and sustainability in the farm sector and supports the farmers’ community.

“We expanded our presence in key geographic regions in various states of our country and diversified our product offerings to better meet the evolving needs of our customers. This strategic expansion allowed us to capture new market opportunities and further solidify our position in our industry,” Khandelwal stated.

“With robust expansion across all key performance indicators, we witnessed a substantial increase in both revenue and market share last year, reflecting the successful execution of our strategic initiatives and the resilience of our business model amidst challenging market conditions. This growth was underpinned by our relentless focus on innovation, customer satisfaction, and operational excellence,” he shared.

Filling the digital gap

By far, BL Agro seemed to have put all its eggs in one basket by diverting its efforts largely towards an offline existence, having a robust distribution network of 100,000 retailers across 200 cities, but its e-commerce portal is still “in a nascent stage."

So, is the FMCG brand now bracing up for the shift? Khandelwal is affirmative.

“We recognise the importance of adapting to changing consumer behavior and market trends. In today's digital age, there is a growing need to shift focus to digital channels and innovation to stay competitive and relevant.”

The company usually sets aside 30-40% of its overall marketing budget for digital as it identifies the need to prioritise technology and innovation for customer retention and participation.

“By leveraging digital technologies, we can streamline operations, improve efficiency, and create more personalised experiences for our customers. We have always recognised the importance of staying ahead of the curve by continuously innovating and adapting to changing market dynamics. As we look towards the future, innovation will remain a central focus for BL Agro.”

“Our e-commerce portal is still in a nascent stage but picking up rapidly. We soon expect it to be contributing substantially to the revenue share,” he added.

Keeping up with the legacy

BL Agro was launched as a traditional mustard oil business in the pre-independence era by brothers Kishan Lal Khandelwal and Bishan Lal Khandelwal, taken forward by its chief managing director and Ashish Khandelwal’s father, Ghanshyam Khandelwal, during a time when oil was sold in loose polythene bags. The company has evolved and seen a huge shift in its operations and functioning since then, but Khandelwal says the core values and principles of running a homegrown business have not changed.

“Our commitment to excellence, integrity, and customer satisfaction continues to guide every aspect of our business. We prioritise maintaining strong relationships with our stakeholders, upholding ethical standards, and delivering high-quality products and services,” Khandelwal said.

“While we have embraced change to stay competitive in a dynamic marketplace, our fundamental values and commitment to excellence remain at the heart of everything we do,” he added.

Commenting on the future trends in the FMCG sector, Khandelwal said the positive sentiment will continue to remain in the category with a focus on technology at the core of all merging processes.

“The FMCG food sector in India is at an exciting crossroads, poised for sizable growth and transformation. The integration of digital technologies, sustainable marketing practices, and strategic collaborations are defining the industry's dynamics. As we plan for the future, the focus will be on adaptability, innovation, and a keen understanding of the evolving consumer trends. Players who can embrace change and align with emerging trends are likely to thrive in the vibrant possibilities.”