Hindustan Foods’ subsidiary to channel US$16.9m worth of investment in new manufacturing plant

INDIA – Hindustan Foods Limited (HFL), one of India’s leading FMCG firms is seeking to invest ₹125 crore (US$16.9m) to set up a food and beverages manufacturing facility in north India for a leading brand.

The new projected undertaken through its wholly-owned subsidiary HFL Consumer Products is aimed to enable the company achieve ₹2,000 crore (US$271m) of revenue by the fiscal year 2021-22.

The company had reported revenue of Rs 771.90 crore (US$104m) in financial year 2019-20.

“With strong manufacturing capabilities, management expertise and strong customer relationships, Hindustan Foods is well positioned for multi‐fold growth in coming years.”

Sameer R Kothari – Managing Director, Hindustan Foods

In addition, HFL stated the establishment of the new facility is part of the company’s consolidated plans to extend its footprint in the contract manufacturing space for FMCG products.

Commenting on the new investment, Sameer R Kothari, managing director, Hindustan Foods said, “The demand for contract manufacturing in the FMCG industry is growing rapidly. We are in continuous discussions for new projects with our customers which include some of the leading brands in this space.

“We  continue  to  be  a  preferred  partner  and  one  stop  solution  provider  for  our  customers.  With strong manufacturing capabilities, management expertise and strong customer relationships, Hindustan Foods is well positioned for multi‐fold growth in coming years.”

Work on the new facility will commence from the last quarter of the current fiscal year and commercial production is expected to begin from Q4FY22.

HFL was established in 1988 as a result of Dempo Group’s foray into the FMCG segment through a joint venture with Glaxo India Limited, with the objective of manufacturing nutritional food products.

In 2013, Vanity Case Group bought a controlling stake in Hindustan Foods Limited from Dempo Group of Goa and since then the company has diversified across various FMCG categories with manufacturing competencies in food and non-food, extending to Personal Care, Home Care, Food & Beverages, Leather Shoes and Accessories.

Some of the company’s partners include Hindustan Unilever Limited, Danone, PepsiCo, among many others.

Status of India’s food processing industry

According to a report by Invest India, India’s food processing sector has been growing at an Average Annual Growth Rate (AAGR) of around 8.41 % between 2014-18. The sector constitutes 8.83 % and 10.66 % of gross value added in manufacturing and agriculture sector respectively.

The industry’s output is expected to reach US$ 535 billion by 2025-26 propelled by population growth, rising household incomes, urbanization and the growth of organized retail.

The Government of India has also been instrumental in the growth and development of the sector

Recently through the Ministry of Food Processing Industries (MoFPI) it approved the implementation of 28 food processing projects worth over ₹320.33 crore (about US$43 million), spread across over 10 states.

Other than government support, India’s food sector attracted US$ 4.18 billion in foreign direct investment between April 2014 – March 2020.

The Confederation of Indian Industry (CII) estimates that the food processing sector has the potential to attract as much as US$ 33 billion of investment over the next 10 years and also to generate employment of nine million person-days.

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