Amway India inks MoU with Indian state to set up facility

Amway India, a direct selling FMCG firm, has revealed that it has signed a memorandum of understanding (MoU) with state government of Tamil Nadu in India to invest around INR3bn ($56.86mn) to set up its own facility there, to meet the demand of the region’s market.

The facility, which is going to be constructed in the Sipcot Industrial Estate, at Nilakottai in Tamil Nadu, will manufacture Amway’s various products including nutritional tablets and cosmetics, reported business-standard.com.

Amway India is mulling investing around INR4.2bn ($79.6m) in the facility and plans to start its commercial operations before the first quarter of 2015.

Amway India director and chief financial officer Anshu Budhraja told the website that the firm posted a sales turnover of INR21.3bn ($4.37bn) in 2011 in India, out of which Tamil Nadu accounted for 22% sales.

"The facility would help us to cater to the requirements of the regional market," Budhraja added.

Budhraja also said there is a greater demand for the health and beauty products in India and the company has its proprietary, patented products to serve the segment.

Amway India currently has around 550,000 active customers in the country, and it has 45% market share in the total direct selling market of $1bn in India, Budhraja added.

As per the MoU signed with the state government, Amway’s new project has been accorded a mega project status and will have various financial benefits.

The company is planning to add considerable number of new jobs at the manufacturing facility.

Amway India is a wholly-owned subsidiary of Amway , USA, which has its presence in 80 countries.

The firm currently offers over 130 products in five categories -of personal care, home care, nutrition and wellness, cosmetics and great value products.