Corporate Feature     

Published: Feb 15, 2023
Updated: Feb 15, 2023

Vikas Lifecare

Substantial stake in Kohinoor Foods

In line with its future-oriented growth strategy, articulated to focus on building a robust portfolio of products, Vikas Lifecare has decided to acquire a substantial stake in Kohinoor Foods by investing up to Rs 250 crore. This acquisition will enable it to broadbase its product portfolio and strengthen and supplement its existing business lines.

Maintains an elated SK Dhawan, Managing Director of Vikas Lifecare, “We are delighted to announce the company’s decision to make a strategic investment of up to Rs 250 crore in Kohinoor Foods. With its legacy of almost five decades, its pioneering and unparalleled positioning in Basmati rice and processed food products, this acquisition will enable Vikas Lifecare to enhance its market presence in the FMCG space. We are targeting closing this deal within 6 months.”

Since 1989, Kohinoor Foods has been present across the globe, including India and over 60 countries, with a wide assortment of food products that include Basmati rice, wheat flour, ready to eat curries and meals, simmer sauces, cooking pastes, spices, seasonings, frozen food, pure ghee, paneer, namkeens and sweets.

The company’s products are preferred by connoisseurs across the globe, ranging from the US, Canada, Australia, New Zealand and the UK to the Middle East and South East Asian countries, with a strong presence on the shelves of reputed retail chains like Booker, Cash ‘n Carry, TESCO, Sainsbury’s, ASDA, Morrisons in the UK, Krogers, Costco, BJs & Whole Foods in the US, WalMart in Canada, Kobe Bussan in Japan, Coles in Australia, Woolworths & Foodstuff in New Zealand, Mustafa in Singapore, PARKnSHOP in Hong Kong, Shoprite in South Africa and Carrefour, Geant, Lulu, Tamimi & Panda in the Middle East.

QUALITY CONTROL

According to Mr Dhawan, at Kohinoor Foods, quality is supplemented by a strong quality control culture with dedicated, fully equipped QC centres and microbiological labs, and processing and manufacturing facilities with a host of approvals and certifications. The company’s products and processing facilities are BRC certified, SQF certified, USFDA compliant, FSA compliant, IFS certified, and accredited with ISO 22000: 2005 (food safety standard), ISO 9001: 2008 (QMS) certification and organic certification.

The manufacturing facilities include world-class fully automated rice processing and final packaging plants located at Murthal, Haryana with a milling capacity of 50 tonnes per hour. Spread over an area of about 36 acres, it has storage capacities of 20,000 tonnes of rice and 50,000 tonnes of paddy, and a production capacity of 1,000 tonnes per day supported by 8 rice grading lines, 16 colour sorter machines, a parboiling capacity of 500 tonnes per day, FFS machines for packing pouches and jars from tetra pack Nichrome, nitrogen flushing in packs by an in-house commissioned N2gas plant, and supported by a strong scientific procurement system.

The company has adequate arrangements for contract farming to ensure consistency of the agri produce and control of the entire value chain of Basmati. The entire chain is documented to the minutest detail, ensuring 100% traceability as per international norms. The company procures organic Basmati rice by coming in direct contact with farmers, and helping them in production with the required technology. The company’s ‘Organic Basmati Programme’ is in collaboration with the Uttarakhand government under the ‘Organic Basmati Export Programme’. Kohinoor Foods Limited has contracts with 1,128+ farmers. Started with a small area of about 110 hectares in 2005, the scheme has been extended to around 750 hectares. The total area of farming organic Basmati rice expected to cross 1,200 hectares soon.

SALES SPURT

Vikas Lifecare is doing very well on the financial front in the current year if the actual performance in the first nine months is any indication. During the first nine months on a standalone basis, its net revenues have spurted by 74.59 per cent to Rs 346.26 crore as compared to Rs 198.33 crore in the corresponding period last year, with EBIDTA shooting up 55.59 per cent from Rs 9.78 crore to Rs 15.22 crore and the profit at net level taking a high jump of 123 per cent – from Rs 6.78 crore to Rs 12.89 crore. In terms of consolidated figures, the company’s net revenues have jumped by 80.48 per cent to Rs 357.95 crore, EBIDTA has risen by 47.59 per cent to Rs 14.44 crore and the net profit has almost doubled to Rs 11.30 crore.