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ConAgra to export food ingredients from India -- Scouts for local producers to join hands

Ch. Prashanth Reddy

HYDERABAD, May 10

THE US Food major, ConAgra, is keen on exporting processed food ingredients from India. The multinational company has already identified a few Indian producers for a strategic alliance or a marketing a tie-up in this regard.

ConAgra is also confident that its Indian subsidiary, Agro Tech Foods Ltd (ATFL), will become a $500-million company within the next five years. It is expecting ATFL's sales to grow at a rate of 20 per cent per annum.

ATFL, formerly known as ITC Agro-Tech Ltd, was acquired by ConAgra three-and-a-half years ago from ITC Ltd. Last fiscal, the company made a turn-around and, for the first time since its acquisition, posted a net profit of Rs 1.9 crore.

ConAgra's President and Chief Operating Officer, Mr Larry A. Carter, told Business Line that the US-based global player was looking at India as its ``primary business opportunity in Asia over the next decade''. He felt that India had better climate than China for private enterprise.

ConAgra is currently exploring the possibility of exporting processed capsicum products, vegetables, dehydrated onions and more specifically, processed spices. The company's priority would be to join forces with Indian producers. ``They know the local en vironment and we know the end-market. If India can produce a product that can be sold in the US or Europe, ConAgra has the infrastructure and the distribution capabilities to market it,'' Mr Carter said.

However, ConAgra is still undecided about the kind of partnership it would enter with the Indian firms. ``It could be anywhere from an equity participation to a simple marketing arrangement,'' he said.

According to him, the processing technology already existed in India. Hence, there was no need for ConAgra to bring in the technical knowhow. But the technology had to be adapted to the product that was customised in different parts of the world.

For example, he said, a food company in Europe or the US wanted 10 different spices blended in a suitable formulation. Here, ConAgra could work with the Indian firm to develop the formulation so as to give the particular European or the American company the flavour it wanted.

With regard to Indian operations, he said ConAgra was primarily looking at basic foods. Apart from consumer packs, AFTL proposed to sell its Healthy World Atta (wheat flour) to bakeries in bags of 25 kg and 50 kg. The company was also looking at opportun ities in snacks business.

Last fiscal, AFTL acquired Rath brand of vanaspati from Siel and restaged it to enhance the brand's competitiveness. Its Sundrop brand of sunflower oil continued to retain its market leadership in the refined oil consumer pack market.