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Mother’s Recipe acquires Elmac Agro to go east; eyes 30% growth this fiscal
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Thursday, 05 November, 2015, 08 : 00 AM [IST]
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Pushkar Oak, Pune
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fiogf49gjkf0d Desai Brothers Ltd, primarily known for its pickle brand Mother’s Recipe, has acquired Elmac Agro Manufacturing Pvt. Ltd (EAMPL), at a cost of Rs 30 crore. This alliance is valued at 1.9 times sales turnover, which will help the brand capture its market in the east. An announcement in this regard was made at a press conference held here on Wednesday.
“This deal will be a positive development for DBL-Food division and is in line with our company’s vision to be a valued brand in Indian packaged food space. Elmac, which has strong brand equity in the eastern region, will help us strengthen our existing product portfolio and enable us in expanding our product categories. Plans of new product extensions under the Mother’s Recipe brandname, which is already in process, is expected to give us an additional growth of at least 25% in the eastern region. Work has already started to refurbish and expand production capacities at EAMPL and realigning product portfolios. In the next three years, we are targeting a sales turnover of over Rs 70 crore under Elmac brand from the region,” stated Sanjay Desai, executive director, Desai Brothers Ltd, while commenting on the alliance and acquisition.
Meanwhile, Sanjana Desai who takes care of business development for the company, while stressing on the presence of the company globally and nationally, said, “We are among the top 500 food brands of Asia. We export our pickle range and other products to countries like the UK, Canada, Iraq, and Oman. We have several varieties which are specifically dedicated to the regional significance. We have dedicated pickles to Andhra Pradesh, West Bengal etc.”
Production and manufacturing
The manufacturing facility is based at Sarole (near Shirwal on the Pune-Bangalore highway) for food processing. “Our unit complies to all the guidelines like HACCP, USFDA etc. The facility enables production of 200,000 bottles of pickles per day,” states Sanjana Desai.
Sanjay Desai, while speaking on the company’s growth plans, states, “The company is eyeing a growth of 30% in the current financial year against a turnover of over Rs 200 crore in 2014-2015. We entered the food business with an aim to provide consumers with a holistic cooking and culinary experience while perfectly balancing health and taste. Apart from the pickle category where we command a robust market share of 25%, the company intends to grow its other verticals like RTE, RTC and instant mixes with a range of new product launches under each category.”
“We are looking ahead to explore more in the HoReCa segment. The business to business line is prospering very well. We also export around 600 containers per year to at least seven countries. Our segments exported are pickles, chutney, spices, papads, RTC, RTE (heat and eat),” said Sanjay Desai.
Expansion
“We will be expanding to the sauces segment and spreads, as Elmac is our new alliance. This will help us explore more in the eastern part of India. This will see a boost in our distribution network to increase by 200 to 300 distributors,” said P Rajan Mathews, VP, marketing and sales, Desai Brothers Ltd.
“We have acquired strengths of Elmac like its hold on the eastern market and also it will add up Rs 10 crore to our business,” stated Sanjay Desai.
Speaking on the R&D that has gone into the products, Sanjana Desai explained, “We usually research a new pickle recipe within the families of various regions of India and send them back the recipe which we have crafted and once the recipe is approved by the respective family we take it on our offerings.”
New introductions
In tune with the current trend, the company is planning a digital footprint as well. “The industry has a big segment of RTE and RTC which has been successful online-e-commerce medium. When we started we only were Rs 30,000 industry and today we are Rs 2.5 lakh industry. These figures are only of Bangalore alone which are very motivating for us. Now we will come up with some other cities in India,” stated Mathews, while revealing details on the company’s e-commerce plans.
The brand offers 20 varients each in veg and non-veg RTE on e-commerce websites. Mathews confirmed that the brand would soon have its own web portal. It will be active by January next year and products will be available on Amazon by December. In the international market, the brand has 75 variants of pickles based on their regional preference. “People in the US prefer less spicy food thus we have mild versions for them,” stated Mathews while explaining the products’ international forays.
“We have focussed activities, when it comes to advertising and promotions. We try to encash through our advertisements and promotional activities in the festive season like Diwali and Rakshabandhan,” stated Balraj Dubey, VP, commercial (food dividion), Desai Brothers Ltd.
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