News: Mallya's United Spirits enters China

(PTI 24/01/2007) Mumbai - United Spirits Ltd will set up a subsidiary in China and has already deputed a representative there to study the market, company Chairman Vijay Mallya said here. "China's market potential is good," Mallya said adding that the company's process of setting up a subsidiary there "has already begun". Addressing analysts while declaring his company's financial results for Q3 FY 07, Mallya pointed out that language was a "big barrier" in the Chinese market. The company clocked a profit after tax in Q3 FY 07 at Rs 3.42 bn as against Rs 17.08 crore in the year-ago period. Its net income from operations for this quarter stood at Rs 773 crore against Rs 3.99 bn in the same period last fiscal. "The reason for the huge jump in profits is because of the USD 300 million-acquisition of Shaw Wallace. The integration process of the Shaw Wallace with UB has been successful," he said. On the Whyte and Mackay acquisition, he said, "We are negotiating with owners but we do not wish to overpay and stress ourselves." He refused to divulge any figures for the acquisition citing the confidentiality agreement entered into with Whyte and MacKay. Mallya sees India as an emerging market for Scotch whisky, which India cannot produce, he said. "Without acquisition we would miss a growth opportunity," he said. If the acquisition goes through United Spirits will fund it through its treasury stock, he said.