Rice exporter LT Foods Ltd said it has formed a joint venture with Japanese snack company Kameda Seika Co. Ltd to make and sell rice-based snacks in India.
The JV will start manufacturing snacks at the company’s Sonepat facility in Haryana in the next financial year that begins 1 April 2017, LT Foods said in a statement. It didn’t give any details.
The Rabo Equity-backed company has two facilities in Sonepat and three more in other parts of the country. It also has two packaging facilities in the US.
Kameda Seika, which was established in 1957, makes and sells rice crackers and snacks at its four factories in Japan, according to its website.
Separately, The Economic Times reported that the Indian company will hold a 51% stake in the JV. The two partners will invest $10 million and will later consider exporting to other South Asian markets as well, the report said, citing LT Foods managing director Ashwani Arora.
This is the third deal sealed by LT Foods this year to ramp up its business.
In July, it acquired the 817 Elephant brand of rice from Amritsar-based Deva Singh Sham Singh to strengthen its presence in Canada, the US and Israel.
This followed a deal to buy the rice export business from consumer goods major Hindustan Unilever Ltd. It has already got approval from the competition regulator to go ahead with the transaction.
LT Foods had said earlier that the acquisition of Hindustan Unilever’s export business would help it enter the markets of Qatar, Oman and Bahrain, besides strengthening its presence in the traditional export bases of Saudi Arabia, the UAE and Kuwait.
Earlier this week, the company said it is setting up a plant in Rotterdam to process brown rice and distribute it within Europe.
The company recently saw food- and agriculture-focused private equity investor Rabo Equity Advisors partly exiting investment.
LT Foods has grown almost three times since Rabo invested in the firm. In the year ended 31 March 2016, it clocked consolidated net sales of Rs 2,979 crore and net profit of Rs 72.1 crore. In the April-September period of this financial year, the company reported a 7.5% year-on-year jump in consolidated net sales to Rs 1,554 crore.
LT Foods’ most popular brand is Daawat. Its other brands include Royal; Ecolife, an organic food brand that includes rice, pulses, oil seeds, cereal grains, spices, nuts and fruits and vegetables; Devaaya, which offers branded basmati rice, with staples such as wheat flour; and Heritage.
By Joseph Rai
Source: VC Circle
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