Basmati exports to middle east has now grown to over 1.50 million tonnes, a sizable chunk of the near three million tonnes of exports worldwide that fetches India a whopping Rs 12,000 crore a year. (About $2.55 billion)
If the non basmati rice exports too were to be opened up, exports of this staple diet of several countries globally, would bring in foreign exchange earnings of about Rs 20,000 crore (about $ 4.25 billion). India banned Non-basmati exports in 2008 for reasons of preserving food security, but the policy could be up for review any time before the Khariff sowing ahead this year.
LT Foods (Earlier LT Overseas Ltd), listed in the BSE (current share price Rs 50 plus) has a strong presence in over 50 countries with its premium
brand Daawat, predominantly in North America (Canada and United States). It is now rapidly growing into a diversified food company and has drawn up plans to focus on the Middle East this year. South America is also a possible destination for the Daawat brand, which comes in an attractive international packing of four distinct varieties (Biryani, Super, Premim, Pulao)
“We hope to grow our market here in this region particularly in UAE (Dubai), Saudi Arabia and Kuwait, where there is a good demand for rice, from the local population as also the sizable non resident Indian community “, says Mr. V K Arora, Chairman and Managing Director of LT Foods.
Indian Basmati currently trades anywhere in the range of $ 900 minimum to a maximum of about $ 1200 a tonne for the premium brands. PUSA 1121 is also a much sought after rice since its classification as Basmati by the commerce ministry for trade purposes. Foreigners like its extra length and aroma. Government has clamped a Minimum Export Price (MEP) of $ 900 a tonne to ensure only the best varieties are exported and there is no threat to food security.
LT Foods hopes to become a Rs 1500 crore ( about USD 311 million) company this year through a pro-active role in not only promoting its flagship business of rice exports but also emerge as a global rice specialist. It’s diversifying into various areas ranging from as vast as the healthy food snacks (rice based) to producing energy (from rice husk). “We have ambitious plans and we are working towards this goal”, Mr. Arora said in an interview to this correspondent.
‘My My’ the new Product
The company is on the brink of launching a wide range of rice based products pan India Under the brand name “My My” and with its well established marketing network could give a run to the competitors in similar business, industry sources claimed. “The good thing about our products is that they are baked and very low on fat content. So it’s the ideal snack for a health conscious person” Arora said adding, “While most food snacks contain 35% fat, our snacks – My My rice cakes and My My rice chips and the like – will have only 7% fat”.
LT Foods has built up a good infrastructure to maintain high standards of quality in the export and food snack business, from procurement to processing and packaging and dispatch. The company has a 65 metric tonne processing capacity in India, mostly located in the northern states of India, including a huge 35 metric tonne processing unit at Sonepat in the northern state of Haryana. The processing units are spread over Haryana, Punjab in Northern India and Madhya Pradesh in Central India.
LT Food has drawn up ambitious plans to grow its business by a whopping 25% in the near future, which means, the company has the prospects of growing into a Rs 2,000 crore ( about $ 426 million) company with all its verticals growing simultaneously with rice exports as the company’s fundamentals are quite strong, investment bankers claimed.
Man Behind Growth
The company began in a modest way as Lalchand Tirathram Mills, (from where the LT acronym comes), a trading company started by Raghunath Arora in the sleepy Punjab hamlet of Bhikiwind in 1965. Slowly but steadily it grew into a commissioning agency and a partnership firm by 1977.
V K Arora, the current chairman, joined the family business in 1978 and has helped the company grow into a global rice specialist with his clear universal vision. He has helped to create modern, state of the art rice processing factory in Sonepat, Haryana. This unit not only helped the company target the overseas market, it also spurred LT Foods to promote branded and packaged products, creating its own distinct identity in the market which is crowded by poor and consistent quality products, claim industry sources.
The company has since grown from strength to strength in the business of milling, processing and marketing of branded basmati rice and manufacturing of rice food products for the domestic and overseas market, says Mr. Arora.
LT Foods has metamorphosed from a traditional Indian company into a modern corporate adopting the latest international concepts of management to make it a truly distinct corporate entity, company sources said.
LT has plans to become an energy company, utilizing the huge amounts of rice husk at its disposal. Its foray into the non-conventional sources of energy would mark it as a completely diversified company and help it to even contribute power to the grid besides using some of the energy produced to run its own captive power plants.
The company has several global plans, which are under feasibility study and under wraps. But a sneak peek shows they are certainly promising and could propel the company into wider horizons and give it a much bigger identity as a diversified food company – an exporter, an FMCG in health foods, An energy producer and …..?. The sky is the limit.