The Hindu Business Line : Saraf Foods knows its onions and bananas

SURELY, it must be what many people have dreamt of doing in the past few decades. Make a killing in commodity sales, by sourcing vegetables at cheap rates from one country and selling it at a huge premium in another part of the world.

Nothing could suit this dream script to perfection than procuring onion at Rs 3 per kg in India and selling it at $11 per kg in the US and the European markets. This is precisely what Mr Suresh Saraf, Managing Director of the Vadodara-based Saraf Foods Ltd, has managed to do during the past one decade. And he has not limited the scope of his business to only onion.

The other major component of his business portfolio is bananas, which he buys at Rs 6 per kg from the markets and sells at f.o.b of $10 per kg.

Talking to Business Line, Mr Saraf said it was nowhere as simple as mere trading as the process involved one inevitable step called freeze drying, a unique technology of food preservation. Going by the terminology of lypholisation, the process first involves the conversion of water molecules of the food products into ice and then the direct reconversion of the ice molecules into vapour, by passing the water state, under high vacuum.

"The process, also known as sublimation, was initially procured by us from IBP's engineering division in Nashik in 1993. IBP, which had been till then extending the lypholisation technology to pharmaceutical companies, had then supplied the plant to three food-processing companies .

While one has shut down, the other is being run by us and has made it clear that its not as simple as buying onion at Rs 3 per kg and selling it at Rs 300 per kg," Mr Saraf said.

Also many did not realise that freeze dried onion gave only a 10 per cent output while fruits such as bananas gave a 20 per cent output.

Soon enough, seeing that some of the US cereal manufacturers were turning to banana as an acceptable flavour, Saraf Foods began its foray into this fruit and today its sales accounts for 60 tonnes per annum (tpa) against 30 tpa of onions.

"However, in value terms, onion is still at 30 per cent, banana also at 30 per cent while sweet corn, which we procure through contract farming in Gujarat and Maharashtra and sell 60 tpa at $7 per kg account for another 30 per cent. The rest comes from vegetables such as okra and we are now hardpressed to raise our production capacity as demand is catching up even in destinations such as Mexico and Chile,'' Mr Saraf said.

Having fabricated their own plant in 1996 at less than half the cost as that supplied by IBP, Saraf Foods is now going in for another 2 tonne per day (tpd) plant, which will take its total capacity to 5 tpd, including the one tpd facility that it hires out in Ahmedabad. Once that gets into place, Saraf Foods would be in a position to raise its sales to Rs 12 crore from the present level of Rs 4.5 crore.

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