This article was been written by Sanskrity Sinha for IBTIMES.COM
Primacy Industries, one of the top global manufacturers of scented candles, has acquired US-based Midwest-CBK, a leading brand in the home decor industry in the US. Gautham Pai, chairman & MD of Primacy Industries speaks about the acquisition to IBTimes.
Manipal Group's home fragrance company, Primacy Industries, one of the top global manufacturers of premium scented candles, has acquired US-based Midwest-CBK, the company announced on Thursday.
According to media reports, Primacy Industries, based in the port city of Mangalore in India's southern state of Karnataka, is said to have acquired the deal worth $200 million, though the company declined to comment on the value of the deal.
Midewest-CBK, which has more than $ 100 million revenue, is a leading brand in the home decor and fragrance industry in the United States and owns the famous, 100 year old scented candles brand, the Colonial Candles, among others.
The acquisition will provide Primacy Industries a bigger hold in the private label scented candles business in US, Gautham Pai, chairman & MD of Primacy Industries, said, adding that the company holds 85 percent of the share of candles exports from India and account for about 10 percent of the share of total candles imports in US.
Moreover, with the acquisition, the combined turnover of Primacy Industries and its US-based subsidiary, MVP Group International, is now close to $300 million, he said.
Gautham Pai speaks more about the acquisition to IBTimes.
IBT: Manipal's Primacy Industries has acquired US-based CBK. Could you give us details about CBK?
Pai: MIDWEST-CBK is a leader in the Holiday, Home Décor, Gifts, Candle and Outdoor Living products in the US. The company owns household brands like Colonial Candles, Seasons of Cannon Falls and CBK. Colonial is a 100 year old scented candle brand. The company has sales greater than $ 100 million and has relationship with more than 30,000 premium independent stores. The company has a manufacturing base in Elkin, North Carolina.
IBT: What are the synergies of this acquisition? In what ways are you going to enhance cost efficiencies and revenue of the new business?
Pai: The acquisition of Midwest-CBK provides us immediate access to a large distribution foot print and strong presence in the branded candles space. One of the strong point of Midwest-CBK is the in-house product design team which has been delivering high margin products every season.
This acquisition makes us the largest player in the private label scented candles business with ownership of established brand names. We will also be the largest integrated player in this business with manufacturing and sourcing base in India, Vietnam, Hong Kong and China and market access to US and Europe. We will now be able to integrate the complete supply chain for the existing products of Midwest-CBK and gain technical economies of scale. Midwest-CBK also opens up the large giftware segment in which we see immense global opportunity.
IBT: It's been mentioned that Manipal has acquired CBK via MVP. Could you provide us details of MVP and for how long Primacy has been associated with MVP?
Pai: MVP has been a subsidiary of Primacy for slightly more than a year. However, Primacy has been associated with MVP Group right from its inception 7 years back. The original promoters of MVP Group have been the joint owners of Primacy right from inception.
IBT: What is the total Fragrance candle market value and post this acquisition, what will be the total market share Primacy will have in Fragrance candle category?
Pai: Annual US retail sales of imported candles is estimated at approximately $ 2 Billion. This excludes the sales of candle accessories and giftware. We will be looking at a market share of 20 to 25 percent in the coming years. Further, the acquisition opens us newer market segments where we will see growth by integrating our supply chain.
IBT: Do you have more acquisition plans or what are the future, expansion plans for Primacy? Is the company only into candles with respect to fragrance market or more home fragrance products are its forte?
Pai: To consolidate our presence in the branded segment, we are presently in talks with four high premium brands. We also have aggressive expansion plans for Europe. You would see us strengthening our distribution as well as manufacturing base in Europe. Our long term objective is to be a dominant player in the multi product global home fragrance business. To achieve that strategy we will use organic as well as inorganic expansion.
IBT: can you tell us about the global geographical presence of Primacy Industries and the core strengths of Primacy products?
Pai: Presently our biggest presence is in the US, followed by Europe, Japan, Middle East and India. Primacy’s core strength is its manufacturing capability. We can confidently say that our candle manufacturing processes are today the best in the world. All our products meet the standards of the International Fragrance Association (IFRA) and we use lead free candle components. Further, we have long standing relationship with the large retailers in US and with Midwest-CBK, we get strong relationship with the large network of premium independent stores.
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