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With the Mauritius-based DSG Consumer Partners, a private equity firm, picking up 29 per cent stake, for Rs 10 crore, in freeze-dried agricultural products maker Saraf Foods Ltd, the Vadodara-based company is set to expand its input capacity by 1.5 times by September 2014.
DSG will make Rs 4.5 crore as primary and Rs 5.50 crore as secondary investment, Suresh Saraf, Managing Director, told Business Line here. In the last five years, the company has already quadrupled its capacity to 7 tonnes a day.
Saraf Foods, a B2B company mainly supplying freeze-dried vegetable, fruits and herb products to food majors like Hindustan Unilever and Nestle in India and other global players abroad, will invest Rs 15 crore on increasing its input capacity from 7 tonnes per day to nearly 10 tonnes a day. Besides Rs 5.50 crore from DSG, it has got a Rs 8- crore loan from SBI and the balance Rs 1.5 crore would come from internal accruals, he said.
“This is expected to double our turnover from Rs 26 crore in FY13 to Rs 50 crore in FY15 and Rs 200 crore by 2018,” Saraf said. About 70 per cent of the company’s revenue comes from exports.
The company, which commenced production as a startup in 1992 with a funding of Rs 1.25 crore from Gujarat Venture Finance Ltd (GVFL), is a niche products firm with its competitors in India being only two: Flex Foods, Dehradun, and Accelerated Freeze Drying Company Ltd (AFDC), Kochi.
It currently supplies nearly eight volume-based freeze-dried products such as sweet-corn green peas, onions, green pepper, banana and potato and about 25 other need-based products.
Saraf Foods procures about 60 per cent of its requirement of sweet corn etc from local contract farmers, about 70 of whom have tied up with the company for supplies.
Deepak Shahdadpuri, Managing Director, DSG Partners Asia Pte Ltd, said his investment firm has “built a track record of investing for the long-term with an investment horizon of 6 to 10 years, and bring significant experience in the food and beverage processing sector.”
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