Britannia appoints former RBI Governor Urjit Patel as Independent Director

INDIA- Snack and FMCG giant Britannia Industries has announced the appointment of former Reserve Bank of India (RBI) Governor Urjit Patel as an Independent Director to strengthen the board’s expertise and improve corporate governance. 

The appointment is for a 5-year term, albeit subject to approval by shareholders in the upcoming AGM scheduled for August 12. 

Patel brings a wealth of experience in the Indian retail and finance sectors. As RBI’s 24th Governor from 2016 to 2018, he played an important role in formulating and implementing reforms in the country’s economy. 

He previously served as RBI’s Deputy Governor from January 2013 to his appointment in 2016, where he was in charge of monetary policy, economic research, statistics, and information management. 

Sunil Siddharth, Chairman and MD of Alul Limited was also appointed to Britannia’s board in a similar role. He has a 4-decade career in corporate governance, working for the industrial chemicals company since June 1984. 

The appointees are expected to help the snacking and FMCG giant improve its current market position, which has been affected by several challenges over the past few years.  

The FMCG and snacks giant has faced financing challenges and operational efficiencies. Earlier in the year, the company announced plans to close down older, less efficient production facilities near urban areas and replace these facilities with modern factories capable of handling higher production volumes.  

On June 24, the company announced plans to shut down its second oldest factory in Taratala as part of its internal strategy for enhancing operational efficiency and cut costs. However, the closure of these facilities and the associated cost cutting efforts have significantly eaten into the company’s sales and revenues, threatening its market position.  

Rival ITC Limited recently surpassed the company as the second-largest packaged foods company in India by sales volume, recording consolidated sales of Rs 17,195 crore (US$2.058 billion) in Q1 2024 compared to Britannia’s Rs 16,769 (US$2 billion) in the same quarter. 

The appointments are expected to contribute to a restructuring of the company’s corporate governance strategy and turn around the company’s current trajectory.  

The market appears to have welcomed the high-profile appointments. Britannia’s shares closed with gains of more than 1.5% on the National Stock Exchange (NSE) after the announcements.