Post Elmac Agro acquisition, Mother’s Recipe eyes Rs 70 cr sales in East

With an aim to capture a larger market share in the Indian packaged food industry in the East, Pune based Desai Brothers Ltd(DBL), known for its pickle brand Mother’s Recipe, has recently acquired Kolkata based Elmac Agro Manufacturing Pvt. Ltd (EAMPL).
The alliance, valued at 1.9 times sales turnover, will enable Mother’s Recipe to strengthen their reach in the eastern regions more effectively and efficiently, owing to the Elmac’s existing strong manufacturing and network base in East.
“This deal will be a positive development for DBL- food division and is in line with our company’s vision to be a valued brand in Indian Packaged Food Space. Elmac which has a strong brand equity in the eastern region will help us strengthen our existing product portfolio and enable us in expanding our product categories,” Sanjay Desai, Executive Director, Desai Brothers Ltd said, in an official release.
“New product extensions under the Mother’s Recipe brand name, which is already in process is expected to give us an additional growth of atleast 25% in eastern region. We have already started to refurbish and expand production capacities at EAMPL and realigning product portfolios. In the next three years we are targeting a sales turnover of over INR 70 crores under Elmac brand from the region,” he added.
Under the new setup, the existing management will continue to look after the manufacturing & operations facilities, while Mother’s Recipe will manage the overall marketing, sales and distribution for the brand Elmac.
“Over a period of time, we looks at growing our volumes from Kolkata and the eastern region which currently contributes about 20% of their domestic sales,” the company said.
Desai Brothers Limited, which diversified into the food business in 2002 under the brand name ‘Mother’s Recipe’, has witnessed exponential growth, CAGR of over 25% and has a strong presence across India and the global arena especially in the Middle East, Australia, UK, Europe, US, Canada and Africa.
“The company is eyeing a growth of 25% in the current financial year against a turnover of over INR 200 Crore in 2014-15. Apart from the pickle category where we command a robust market share of 25%, we also intends to grow our other verticals like the Ready-to-eat (RTE), Ready-to-cook (RTC) and instant mixes with a range of new product launches under each category,” Desai said, while sharing company’s expansion plans.
According to a report in India Brand Equity Foundation (IBEF), the Indian food industry presently stands close to USD 135 billion with a CAGR of 10 per cent. It is expected to touch USD200 billion by 2015. The total processed foods market size is Rs 1500 crore, out of which RTC’s market size is 600-700 crore (barring noodles) and is expected to grow around 20- 25 per cent over the next five years.