Leading cereals and pulses processor Lakshmi Energy and Foods Ltd has embarked on a major expansion and diversification plan.
Will invest Rs200 cr a year in expansion and diversification over the next 4 years
MUMBAI: Leading cereals and pulses processor Lakshmi Energy and Foods Ltd (LEAF), formerly known as Lakshmi Overseas Industries Ltd, has embarked on a major expansion and diversification plan.
From milling rice, the Chandigarh-based company has ventured into solvent extraction, wheat flour milling, bio-mass power generation, packaging and retailing of foods, contract farming and bran oil refining.
The company, which has invested Rs300 crore in the last couple of years, plans to invest Rs200 crore each year over the next four years. Half of this would come from internal accruals and the rest via term loans.
IS Gumber, director, finance, LEAF told DNA Money, “Over all, the business scenario for agri goods has become very favourable. Margins for us are improving because of strong demand, which supply from the agricultural sector is not able to meet.”
Capacity expansion in all its businesses is on the way.
The installed capacity for paddy processing is expected to reach 3 million tonnes per annum (mtpa) by 2010 with the commissioning of a new plant, from 1.35 mtpa now.
During the same period, the solvent extraction capacity will triple from 300 tonnes per day (tpd) to 900 tpd and the cattle feed capacity will quadruple from 70 tpd to 300 tpd.
Meanwhile, to improve the quality of paddy, the company is starting contract farming through its newly established subsidiary Punjab Greenfield Resources Ltd (PGRL). With an investment of Rs100 crore, PGRL will adopt a few thousand hectares of land and help farmers with knowledge, pesticides and better quality seeds. PGRL will be in the business of procurement, trading, exporting cotton, and research and development for the parent company, Gumber added.
Research firm Lotus Knowlwealth said in a report dated March 3, 2008, “Given the size of opportunity, both in LEAF’s main business (rice and wheat) and in the by-products business (edible oils and biomass power) and advantages of scale that LEAF enjoys, its long-term prospects appear bright.”
Recognising the changes in the market because of modern retail, LEAF has also got into retailing of rice and wheat flour.
The brand Lakshmi Foods will slowly roll out across the country and pulses and spices will soon be added to the portfolio.
The company expects to close the current fiscal with revenues of Rs900 crore compared with Rs696.3 crore in the last.
s_tanvi@dnaindia.net
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