The Hindu Business Line : Agro Tech Foods to trim exposure in commodities biz

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Hyderabad Feb. 17 Agro Tech Foods, the branded food products company, has begun a process to reduce its exposure in commodities business and increase its focus on value-added products such as ingredients for hotels and restaurants and for poultry feed industry.

Taking a cue from a similar process undertaken by ConAgra, which is a major shareholder in Agro Tech, the company would reduce exposure in low-margin and volatile business in commodities in phases. "We have reduced our activities in wheat, sugar and pulses," Mr Utpal Sen Gupta, President of Agro Tech Foods, told Business Line.

The company registered a lower turnover of Rs 937.9 crore during 2005-06 against Rs 1,042.3 crore in the previous year, showing a dip by 10 per cent.

However, the profit after tax stood at Rs 10.1 crore (Rs 9 crore).

Reducing exposure would not affect the profitability, Mr Sen Gupta said.

Stating that the company would focus more on value-added products, he said, for one, it is trying to develop food services business, catering to hotels and restaurants. This is basically to supply ingredients that go into food products. It would also supply value-added ingredients to the poultry feed industry.

Reduce duties

He said increase in prices of raw material is a cause for worry. "They went up by 25 per cent in October-November period last year, putting pressures on the end product," he said.

The President felt that one of the solutions is further reduction in duties.

Field trials

The company would conduct field trials with some special varieties of corn during May-July, getting the seed imported in the South. "We will identify which seed will suit better for Indian agro-climatic zones," he said.

After ascertaining the seed variety, it would scale up area in the subsequent seasons.

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