Varun Beverages acquires 50% stake in Sri Lanka’s Everest Industrial Lanka for ₹33 crore to boost its VISI cooler business and expand in South Asia.
Introduction
Varun Beverages Limited (VBL), a key bottler for PepsiCo, has made a major move by announcing the acquisition of a 50% stake in Everest Industrial Lanka (EIL) for ₹33 crore (approximately USD 3.75 million). The deal, approved by the company’s borrowing committee, is a step toward expanding operations in the South Asian beverage market, especially in Sri Lanka.
EIL is a Sri Lanka-based company that produces and sells commercial VISI coolers—essential equipment used to keep and display cold beverages in stores and retail outlets. This strategic partnership between VBL and EIL is expected to benefit both companies by improving supply chains, expanding product offerings, and tapping into a fast-growing market.
🏢 About Varun Beverages Limited
Varun Beverages is a well-known Indian beverage company and a major bottling partner for PepsiCo, managing brands like Pepsi, Mirinda, 7Up, Mountain Dew, and Tropicana, among others.
- Founded: 1995
- Headquarters: Gurgaon, Haryana, India
- Presence: India, Sri Lanka, Nepal, Morocco, Zambia, Zimbabwe, and more
- Main Role: Manufacturing, bottling, and distribution of PepsiCo’s non-alcoholic beverages
Over the years, VBL has grown into a global name in the beverage bottling industry. It handles nearly 90% of PepsiCo’s volume in India and has expanded aggressively into international markets.
🏭 About Everest Industrial Lanka (EIL)
Everest Industrial Lanka (EIL) is a private company based in Sri Lanka, focused on the design, manufacturing, and distribution of VISI coolers and other commercial refrigeration equipment.
- Main Products: Commercial coolers, display fridges, accessories
- Customer Base: Beverage companies, grocery stores, retail chains
- Known for: High-quality cooling solutions, technical expertise, regional manufacturing
VISI coolers are used in retail stores to keep drinks visible and chilled for consumers. They are essential in enhancing product visibility and sales.
🔍 Why This Acquisition Matters
This acquisition is not just a business deal; it is a strategic move with long-term goals. Let’s break down the main reasons why Varun Beverages decided to acquire a 50% stake in EIL.
✅ Key Benefits of the Acquisition
1. Stronger Presence in Sri Lanka
VBL already operates in Sri Lanka but this acquisition gives it local manufacturing capabilities, which means faster supply, better service, and lower costs.
2. Improved Distribution Efficiency
With EIL’s coolers readily available, VBL can place more coolers in stores across Sri Lanka, improving beverage availability and customer reach.
3. Product and Service Integration
Having both beverages and coolers under partial ownership allows better coordination in sales, marketing, and logistics.
4. Cost Savings
Producing coolers locally means less dependency on imports. This reduces transportation costs, import duties, and lead times.
5. Future Growth Opportunities
This partnership opens the door to explore other product categories and services in the commercial refrigeration market.
🌍 Why Sri Lanka?
Sri Lanka is an attractive market for several reasons:
- Growing Urban Population: Increased demand for ready-to-drink beverages.
- Retail Expansion: More supermarkets, grocery stores, and mini-marts.
- Tourism Growth: Hotels and resorts require more cooling solutions.
- Favorable Trade Laws: Easier access for Indian companies.
By investing in Sri Lanka, VBL positions itself to capitalize on these growth opportunities.
📈 Financial Overview
- Deal Value: ₹33 crore (USD 3.75 million)
- Stake Acquired: 50% of Everest Industrial Lanka
- Funding Route: Approved by the company’s borrowing committee
- Expected Returns: Cost savings, better market access, revenue from equipment sales
This investment reflects VBL’s confidence in EIL’s product quality and its potential in the Sri Lankan market.
💬 Statements from Management (Past Reference)
While no direct quote from the current announcement was found, Varun Beverages’ past strategy has always focused on strengthening infrastructure, expanding reach, and creating long-term partnerships.
In previous investor calls and reports, VBL management emphasized the importance of regional self-sufficiency, supply chain control, and in-country production to drive profitability.
🔎 What Are VISI Coolers?
VISI Coolers (Visual Coolers) are glass-fronted refrigerators often used in retail to display drinks. They help increase beverage sales by keeping products visible, attractive, and cold.
These coolers are especially important for companies like Varun Beverages that rely heavily on impulse buying at grocery shops and convenience stores.
⚠️ Potential Risks and Challenges
Although this move looks promising, there are some challenges to consider:
- Political & Economic Instability in Sri Lanka may affect operations.
- Currency Fluctuations could impact profitability.
- Integration Challenges between two different business cultures.
- High Competition from other regional cooler manufacturers.
Varun Beverages will need to manage these risks carefully to ensure the success of this partnership.
🔄 Comparison with Past Acquisitions
Varun Beverages has a track record of smart acquisitions. In the past, it has bought franchise rights from PepsiCo in various Indian states and has entered markets in Morocco and Zambia.
Each time, the focus was on scaling operations, improving infrastructure, and gaining a competitive edge in new or underdeveloped markets.
🚀 What This Means for the Future
This deal is more than just a regional investment. It’s a clear signal that Varun Beverages:
- Wants to diversify its business
- Is moving toward vertical integration (control over more parts of the supply chain)
- Aims to become a leading player not just in beverages but also in related infrastructure
With global demand for cold beverages on the rise, the importance of cooling technology and retail equipment will only increase.
🧠 Final Thoughts
This ₹33 crore acquisition shows that Varun Beverages is planning not just for today, but for the long-term future. By buying into a company that makes the equipment essential for beverage sales, VBL is taking control of a key piece of its value chain.
If successful, this move can serve as a template for similar partnerships in other regions like Nepal, Bangladesh, or even parts of Africa.
Reference
- Varun Beverages’ Corporate Announcements:
- Business Standard – Acquisition of South African Bottler:
- Business Today – Varun Beverages
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