The Hindu Business Line : Satnam Overseas in expansion mode

While the company is buying a rice mill in Britain by investing Rs 32 crore for catering to the European market, it has also planned Rs 8 crore investment in setting up a manufacturing plant for ready-to-eat (RTE) foods in Haryana.

And in line with the company's increased focus on the RTE category, it is also keen to acquire a "small FMCG" firm to spruce up its marketing and distribution network in the domestic market.

"We have decided to buy land in Britain on which a rice mill will be set up. We will export semi-finished rice from India, which will then be processed and sold in the European market. This acquisition will need investment of about Rs 32 crore," the Joint Managing Director, Mr Gurnam Arora, told Business Line.

But even as the company is expanding its rice business overseas, it has set its sight on the nascent RTE market to achieve further growth. Again, it has begun with the UK market, where it is currently negotiating with distributors and departmental stores such as Salesburry and Tesco for stocking its Kohinoor brand of RTE products. These will be manufactured in the new Haryana factory, which can produce up to 50,000 pouches of RTE products per day.

"We think the RTE business has immense growth potential, not just in the domestic market but in the overseas too, specially those areas where there is a sizeable Indian population. In fact, only 30 per cent of our RTE revenues are expected to come from domestic sales while the majority 70 per cent will accrue from overseas business," Mr Arora said.

Besides entering the Rs 80-100 crore RTE market, Satnam Overseas has also launched six variants of what it calls Ready-to-Cook foods and is planning to extend this product segment by launching sauces and cooking pastes. However, the RTC products, sauces and pastes are meant only for the overseas markets.

The Kohinoor RTE products comprise 19 recipes of heat-and-eat variety, which will be increased to 30 by the year end. On the company's plans to acquire an FMCG company in the domestic market, Mr Arora said negotiations were on with several "small" players but declined to divulge details. However, when asked about the mode of financing this Rs 40 crore investment, Mr Arora said that the money needed for the RTE manufacturing will be generated through internal accruals but talks were on for raising some debt to finance the UK rice mill buyout.

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