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Chennai-based Hatsun Agro Product will discontinue its ready-to-eat (RTE) business, which comprised pizzas and pastas, under the Oyalo brand, with immediate effect. “The Covid pandemic dealt a major blow to this business, and it was not viable to continue,” said the company’s chairman RG Chandramogan.
The impact of the closure will be very minimal on the company as it was contributing just 0.5 per cent of the total sales of around ₹6,000 crore, he told BusinssLine.
Covid impact
Due to Covid restrictions, there were not many takers for RTE products, that were manufactured at Karur in Tamil Nadu. Hatsun was a SME player in this segment, and Oyalo was an upcoming brand. It was difficult to sustain this business for an SME brand, he said.
“We did not want to focus too much on RTE products but concentrate more on established products like curd and icecreams. However, we will continue with other RTE products like desserts,” he added.
The cost related to the discontinuance is estimated at around ₹17 crore, says a company communication to the Bombay Stock Exchange.
Investment plans
The company will invest ₹3 crore in the paid-up equity share capital of FP Cygnus Pvt Ltd and Huoban Energy 7 Pvt Ltd not exceeding 26 per cent of the paid-up equity capital of the above companies for consuming solar energy captively for the company’s plants situated in Karnataka and Maharashtra respectively.
Updating on the ongoing projects, the company said that the milk products plant in Uthiyrur, Kangeyam Taluk in Tamil Nadu, with a capacity of 1 lakh kg per day, are expected to commence commercial production in March.
In the cattle feed plant at Sangola in Maharashtra, the existing capacity of production is 2,500 tonnes per month. For an additional capacity of 3,000 tonnes per month, trial production has started, and commercial production is expected to commence by February end, the announcement said.
On Friday, on the BSE the company’s scrip closed at Rs 1,115.60, up 0.18 per cent.
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