Agro-Processed Food - Cygnus - July 09

8/14/2019 Agro-Processed Food - Cygnus - July 09

1/19

Cygnus Business Consulting & Research Pvt. Ltd. 2008 1

Vol.907

CONTENTS

INDUSTRY AT A GLANCE ....................................................................................................2

KEY DEVELOPMENTS ..........................................................................................................3MARKETING .......................................................................................................................3

INVESTMENTS....................................................................................................................3OPERATIONS ......................................................................................................................3

CORPORATE........................................................................................................................4

GOVERNMENT INITIATIVES ..........................................................................................4OTHERS................................................................................................................................5

INDUSTRY STATISTICS .........................................................................................................7

PRODUCT FOCUS ...................................................................................................................8SESAME OIL ........................................................................................................................8

Introduction........................................................................................................................8Benefits Of Sesame Oil .......................................................................................................8Manufacturing Processing...................................................................................................8Market Scenario ..................................................................................................................9Exports of Sesame Oil & Its Fractions ................................................................................9

Outlook..............................................................................................................................9

COMPANY SCAN...................................................................................................................10KOHINOOR FOODS LIMITED .......................................................................................10

Introduction......................................................................................................................10Key Ratios At A Glance ....................................................................................................10Performance Analysis........................................................................................................11Export Market ..................................................................................................................11Recent Strategies ...............................................................................................................13Outlook............................................................................................................................13

STOCK SCAN .........................................................................................................................14

UPCOMING EVENTS ...........................................................................................................16

Industry Monitor

Agro-processed Food


2/19

Industry Monitor Agro processed food July 2009


INDUSTRY AT A GLANCE

MARKETING

New wine goes green in big way - introducing Calnaturale - USA

A record 2.5m tonnes of raw sugar to be imported - India

Imported fruits are a hot pick - India

INVESTMENTS

Mega food parks get Rs37bn push - India

OPERATIONS

Coke opens two plants as part of US$2bn Chinese investment - China

CORPORATE

Nestle to produce new breakfast cereal in Sderot - Israel

Food maker Frutarom acquires the German food maker - Israel

Starbucks Coffee company reaffirms its commitment - Rwanda

China Discovery acquisition corp announces shareholder approval - China

GOVERNMENT INITIATIVES

Tamil Nadu govt prepares roadmap to enhance agricultural output - India

Karnataka government identifies land for mega marketing parks - India

Food Security Law to save Rs135bn - India

OTHERS

Food safety concerns in California rise from processed food items - USA

Bombino Express worldwide fined for illegal import of mangoes to US

Half of vegetarian processed food contains meat - Taiwan

Gulf rice traders fear further dip in prices - India

Non-Basmati rice exports: A threat to national food security - India


3/19



KEY DEVELOPMENTS

MARKETING

AmericasUSA: New wine goes green in big way - introducing CalnaturaleOrganically grown grapes and the ultimate in green packaging have been combined in the development ofCalNaturale, the newest product being introduced by cutting-edge manufacturer, California NaturalProducts (CNP) of Lathrop, CA. The company will bring CalNaturale Cabernet Sauvignona premium wine made with grapes grown organically in the Paso Robles Appellation and packaged in a flexiblecartonto the marketplace in late summer 2009. CalNaturale becomes part of the organic wine categorywhich saw an increase of 30% in 2008.

Asia PacificIndia: A record 2.5m tonnes of raw sugar to be importedIndia's raw sugar imports are set to touch a record 2.5m tonnes in the current sugar season endingSeptember. According to industry estimates, import contracts close to 2m tonnes have already beensigned by various companies and another 5 lakh tonnes is likely to get contracted by September. Till date,over 1.85m tonnes have already arrived. Most of these imports are from Brazil. The initial contracts weretaking place at US$280-300 a tonne. However, with the entry of India and lower output forecast in mostproduction countries, global prices have been on the increase due to which recent contracts have beenmade at US$325-340 a tonne.

India: Imported fruits are a hot pickFresh green kiwifruit from New Zealand and red globe grapes are gradually becoming popular in thedomestic market, say experts. There is good demand for kiwis from Italy, as they are available fromOctober to March, a period which coincides with the marriage season, said Chairman, Yuppa group, anAgroproduce company in India. The company imported 250 tonnes of kiwis and 100 tonnes of red globegrapes last year. Indian kiwi fruit, now being grown in Himachal Pradesh and Manipur, retails in the localmarket at Rs150-180 whereas when imported from New Zealand or Australia, it costs Rs200-250 per kg.It is the same story for red globe grapes. Grapes imported from California cost Rs200-250 per kg whilethe same variety grown in India retails for Rs80-100.

INVESTMENTS

Asia PacificIndia: Mega food parks get Rs37bn pushWith individual units investing Rs25 billion, special purpose vehicles (SPVs) bringing in Rs7 billion andthe Centre contributing Rs5 billion, a sum of Rs37 billion will have a spinning effect on the 10 mega foodparks, going to be set up in the first phase of the 11 th Five Year Plan. A total of 30 mega parks areexpected to be set up during the 11th Plan. Each food park is expected to have around 30 units, which arecollectively expected to attract an investment of Rs25 billion. The parks will be set up in Chittor (AndhraPradesh), Chikmagalor (Karnataka), Dharmapuri (Tamil Nadu), Pune (Maharashtra), Jalandhar (Punjab), Jangipur (West Bengal), Rai Bareilly (Uttar Pradesh), Haridwar (Uttarakhand), Nalbari (Assam) andRanchi (Jharkhand), told Subodh Kant Sahai, Food Processing Industries Minister.

OPERATIONS

Asia PacificChina: Coke opens two plants as part of US$2bn Chinese investmentCoca-Cola has opened two bottling plants in Central and Western China as it attempts to cope withbooming demand across one of its largest and fastest growing markets. The Georgia-based beverage giantsaid its Chinese drinks business grew 19% in 2008, and had grown 10% in the first quarter of 2009,compared to only 2% globally. The company has about half of the Chinese carbonated drinks market and


4/19



in response committed to investing US$2bn over the next three yearsmore than double its investmentin the Sino peninsula over the past 30 years. Coca-Cola-China President noted China had overtakenMexico to become its third biggest market although the average Chinese person consumes only 25 bottlesper year, compared to more than 500 in the US.

CORPORATE

EuropeIsrael: Nestle to produce new breakfast Cereal in SderotGlobal food giant, Nestle is producing a new breakfast cereal at its R&D centre in the southern Israelitown of Sderot. The new cereal was created in Israel and is based on technology originally developed forthe production of a popular new Bamba snack filled with nougat and sold by Osem. The new cereal,which will be sold first in Israel and then worldwide, is to be named Crunch Rolls Nougat. Cereal isinflated into the shape of a cylinder and filled with nougat. Bamba Nougat was launched in Israel in alimited edition as a marketing campaign, but became a hit. This is the first time that Nestle, one of theworld's leading breakfast cereal makers, has produced food products in Israel.

Israeli food maker Frutarom acquires the German food makerIsraeli food and flavouring maker, Frutarom Industries Ltd. announced that it has signed an agreement to

acquire the Savory activity and assets of Chr. Hansen A/S in Germany, in consideration for a cashpayment of approximately US$7.3m. The activity's 2008 sales for the financial year ending on August 31,2008 totalled approximately US$7.7m. The acquired activity holds an extensive customer base, mainlyamong leading meat producers in Germany, and export activities to Scandinavia and UK.

AfricaRwanda: Starbucks Coffee Company reaffirms its commitment As part of its ongoing commitment to East Africa, Starbucks Coffee Company announced thatparticipating stores in the US and Canada will offer for a limited time a selection of African coffees andother products from the region. For every pound of the (Starbucks) Red Whole Bean Coffee sold in theUS and Canada, Starbucks will contribute US$1 to the Global Fund to help support AIDS programmes inAfrica. Stores in the US and Canada will also feature a 100% Rwanda coffee, which is noted for its crispand clean finish.

Asia PacificChina Discovery acquisition corp announces shareholder approvalChina Discovery Acquisition Corp announced its shareholders approved the acquisition by ChinaDiscovery of all of the outstanding securities of the parent company of HeNan Smart Food CompanyLimited, resulting in HeNan Smart Food Company Limited becoming an indirect wholly-ownedsubsidiary of China Discovery. In connection with the closing of the Transaction, China Discovery willchange its name to Si Mei Te Food Limited upon the filing of its amended memorandum and articles ofassociation, and will continue to trade on the OTCBB under the symbols CADQ, CADWE, and CADUEuntil new symbols are issued.

GOVERNMENT INITIATIVES

Asia PacificTamil Nadu govt prepares roadmap to enhance agricultural outputThe Tamil Nadu government has prepared a series of major initiatives including adoption of a system ofrice intensification technology to enhance agricultural production in the state during 2009-2010. The stategovernment would take steps to bring 0.75m hectares under the rice intensification system during 2009-2010 and more attention will be given for perfect adoption of this technology to achieve higherproduction in paddy, Agriculture Minister, said in the State Assembly in Chennai. The Agri Council wouldprovide necessary recommendation for the agriculture development, besides it will play a major role inproviding quality inputs, technologies, post-harvest management, marketing and processing activities.


5/19



India: Karnataka government identifies land for mega marketing parksKarnataka government is planning to set up mega marketing parks in Bangalore, Kolar, Hassan andMysore. The parks will promote horticulture products. In this regard, the state has already identified 100acres of land and the land acquisition is underway. The mega marketing project will be undertaken underthe public-private partnership initiative. The government will acquire the land and hand it over to theprivate companies who are interested in investing in the project. The State government will contributeRs250m while the private firms will chip in the remaining amount. Karnataka has been specifically short-listed for the development of food processing sector because of its 10 agro climatic zones.

India: Food Security Law to save Rs135bnThe Centre may have to spend about Rs135 billion less on food subsidy to implement the Rs3 per kg riceor wheat scheme, as a large section of the people above the poverty line (APL) is unlikely to get cheaperfoodgrains after the enactment of the Food Security Law. The Centre, which is currently discussing withstates and experts the proposed National Food Security Act, has estimated that the subsidy bill will bearound Rs290 billion to cover 65.90 million families below poverty line (BPL), if they are given 25kg ofrice or wheat each month at Rs3 per kg, Government official said. At present, the Centre issues rice atRs5.65 per kg and wheat at Rs4.15 per kg to states for BPL families. But the APL families get wheat atRs6.10 per kg and rice Rs8.30 per kg. The Food Ministry has been proposing for a long time to increasethe issue prices of foodgrains for APL families to at least the levels of their minimum support prices(MSPs).

OTHERS

AmericasUSA: Food safety concerns in California rise from processed food itemsFood safety is a major concern for more and more Americans as food poisoning continues to plaguemany. A mild case of food poisoning, however, may be the least of your worries when it comes to manyprocessed food items. Because of consumer inability or unwillingness to take food safety, which isrightfully the responsibility of the producer, upon them, a lot of people are still becoming sick from thesefood products every year in California. As a result, many are relying on personal injury attorneys to helpthem file damages claims against these companies for not taking appropriate food safety measuresthemselves. They are also helping their clients receive settlement funds that can help cover medical costs,

they will undoubtedly incur from these food-borne illnesses.

USA: Bombino Express worldwide fined for illegal import of mangoes to USMumbai-based Bombino Express Worldwide has been fined an amount of US$40,000 for illegallyimporting mangoes and purple yams from India, without the compulsory treatment, according to a mediareport. Bombino Express tried to smuggle the fruit products into the country last year through the LosAngeles customs declaring them as ladies apparel. According to a statement issued by the CaliforniaDepartment of Food and Agriculture, in July 2008, Bombino Express Worldwide imported 34 packagesof Indian mangoes and yams that were labelled ladies apparel through Los Angeles International Airport.Airport dogs discovered the packages and prevented the produce from entering the food supply.

Asia PacificTaiwan: Half of vegetarian processed food contains meat

The Investigation Bureau has recently found that some processed foods advertised as vegetariancontained meat, and it has vowed to refer producers who knowingly added meat to their products forprosecution on fraud charges. An investigation targeting the producers of the fraudulent vegetarianprocessed foods has been launched to find out whether meat was deliberately added to the soybean-basedproducts to enrich their texture and flavour. The vegetarian foods showing small traces of meat couldhave been contaminated by poorly cleaned work tables or cooking equipment in factories that alsoproduce meat products.


6/19



India: Gulf rice traders fear further dip in pricesRice traders in the Gulf are worried the price of the grain, already hit by the economic crisis and excesssupply, will fall further if India lifts an export ban, traders said. If India has a good harvest of rice this yearand decides to lift its export ban then the rice business will be even less profitable, a trader of Pakistanirice in the Gulf region, said. The price of Basmati rice had fallen to US$1,600 per tonne in June this yearfrom US$1,900 per tonne in the same period last year. If India decides to flood the market with rice, it isexpected that the price to fall by at least another 20-30% by the end of the year, another Gulf rice tradersaid.

India: Non-Basmati rice exports: A threat to national food securityCentre for Environment and Food Security (CEFS), a national NGO, has initiated an aggressivecampaign to ensure food for all. This comes in the wake of government's contemplation to lift the ban onexport of rice and at the same time promising Food for all under the proposed food security act. TheNGO vehemently flayed the union government's plan to bring in a new export policy for rice in a bid toallow export of non-Basmati rice. The CEFS says that easing exports of rice would mean that over 700million poor Indians would be deprived of their right to adequate food. India's current rice export policyrestricts export permit to countries like Bangladesh, Nepal and African countries through diplomaticchannels. The Director of CEFS said that the government should stick to the existing policy, which onone hand allows reasonable exports of rice to friendly countries, on the other it has enhanced the nationalfood security by maintaining comfortable and adequate domestic stocks and keeping a check on the price

rise, making it more affordable for the vast majority of poor consumers.


7/19



INDUSTRY STATISTICS

State-wise Number of Food Processing Facilities (Units) and Quantum ofFunds Sanctioned for Setting up of these Facilities in India

(Rs m)2006-07 2007-08 2008-09 (for first six months)

States No. ofProposalsSanctioned

SanctionedAmount

No. ofProposalsSanctioned

SanctionedAmount

No. ofProposalsSanctioned

SanctionedAmount

Andhra Pradesh 41 134.76 19 61.08 40 137.78 Assam 12127.72 3 10.63 5 9.98Bihar 2 5.89 2 10.00 3 13.14Chhattisgarh 6 19.39 2 9.82 8 26.35Delhi 2 4.97 0 0.00 6 25.20Goa 0 0.00 1 3.40 1 4.91Gujarat 17 58.93 16 50.34 29 104.41Haryana 17 66.50 9 42.42 20 59.23Himachal Pradesh 11 24.16 8 49.09 5 30.55

Jammu & Kashmir 6 12.76 6 13.91 3 4.41 Jharkhand 10.95 0 0.00 0 0.00Karnataka 26 67.06 19 68.64 31 91.94Kerala 30 108.08 14 46.76 32 98.23Madhya Pradesh 8 21.07 4 13.13 12 33.68Maharashtra 83 267.28 43 113.65 98 262.18Manipur 4 11.21 1 6.21 0 0.00Meghalaya 2 4.39 0 0.00 1 5.91Nagaland 1 8.29 0 0.00 0 0.00Orissa 3 15.00 2 8.63 2 7.74Pondicherry 2 3.26 0 0.00 0 0.00Punjab 21 65.77 20 47.00 53 133.33Rajasthan 28 89.00 15 44.68 40 98.80 Tamil Nadu 35117.93 11 40.08 32 138.42 Tripura 12.77 1 5.22 0 0.00Uttar Pradesh 37 124.86 34 129.47 34 135.19Uttaranchal 15 100.76 8 59.26 3 17.50 West Bengal 2386.10 14 42.73 13 49.68India 434 1548.84 252 876.13 471 1488.55

Source: Indiastat; Cygnus Research


8/19



PRODUCT FOCUS

SESAME OIL

IntroductionIndia is one of the major producers of many oilseeds like groundnut,

mustard, sesame seed and others. Traditionally, Indians consumesubstantial quantity of edible oils mainly as a cooking medium. Oilextracted from sesame seeds is not as popular as other edible oils likegroundnut, cottonseed, mustard but it is used as cooking oil in someparts of the country. Sesame oil is also known as gingelly oil and til oil; itis an organic oil derived from sesames, noted to have the distinctivearoma and taste of its parent seed. Sesame oil derives its dark colour andflavour from toasted hulled sesame seeds. It is commonly used inChinese and Korean cuisine, usually added at the end of cooking as aflavour highlight and not used as a cooking medium.

There are many variations in the colour of sesame oil; cold-pressed sesame oil is almost colourless, whileIndian sesame oil, gingelly or til oil is golden. On the other hand, Chinese sesame oil is commonly a dark

brown colour.

Benefits of Sesame OilSesame oil is very high in linoleic acid, one of the two Essential Fatty Acids(EFAs) our bodies cannot produce. Essential fatty acids are necessary fornormal growth and for healthy blood, arteries, and nerves. They keep theskin and other parts of body healthy by preventing dryness and scaliness.Recent scientific research has shown that EFAs also play an important role inregulating blood pressure, cholesterol metabolism, and the flow ofbiochemicals across cell membranes. Overall, EFAs are involved withproducing life energy in our body from food substances, and moving thatenergy throughout our system. Since the advent of food processing,particularly oil and grain refinement, EFA deficiencies and imbalances are

showing up in some people. Linoleic acid deficiencies include hair loss, skin eruptions, mood swings,arthritis-like conditions, susceptibility to infections, failure of wound healing, and in extreme cases, heart,liver and kidney disease. Sesame oil lowers cholesterol and is beneficial for the heart and kidneys. Inlaboratory experiments, researchers at the United States Food and Drug Administration reported that adiet high in sesame oil significantly lowers cholesterol levels in animals.

Manufacturing ProcessingSesame is one of the oldest oil plants in the world, at around 50% it also has one of the highest levels ofoil content. The plants adore the subtropical climate. During blossom, the herb-like growth exudes anenchanting scent. There are white, yellow, brown, and black varieties of sesame. We only use whitesesame, in the form of flour for making bread. When pure, untreated seeds are pressed, not only are thehealthy ingredients retained, but also the plants own content of sesame oil; this provides naturalprotection against oxidisation and gives the oil its shelf-life. When the seeds are not roasted, sesame oil

maintains its mild flavour.

Uses

Cooking Body massage Hair treatment Food manufacture Worship Industrial uses Alternative medicine


9/19



Market ScenarioOriginating in Asia and the Middle East, Sesame has a longhistory as a valuable oil plant, popular as culinary oil, lamp oiland for the preparation of salves and skin care products.Sesame oil is rich in calcium, oleic and linoleic acid and has along shelf-life. It is very suitable as cooking oil, lending foods afine nutty flavour. The light texture and good moisturisingqualities also lend themselves well to skin care preparations,cosmetics, soaps and detergents. Two types of sesame oil areavailable: light and dark. The dark variety derives its colour andstronger flavour from the fact that the seeds have been toasted prior to pressing. Sesame seed provides atraditional source of oil for many communities in India. The states of Gujarat and West Bengal accountfor the maximum production of sesame seeds in the country.In the world market for sesame, India has a reputation of being a netexporter. The country is one of the largest exporters of sesame exportingaround 0.54m metric tonnes sesame annually. As the production inIndia is sufficient to satisfy the domestic consumption demand, the leftover sesame i.e., around 25% of the total production is exported tovarious importing nations of the world.

Exports of Sesame Oil & Its FractionsSesame seed exports from the country are estimated to surge over300,000 tonnes in 2008-09 on account of lower production in Sudan andEthiopia. So far in 2007-08, the country has exported 250,000 tonnes outof the total output of 450,000 tonnes. China alone has imported 60,000tonnes in 2007-08. Considering thedemand in the global markets, sesame seedexports are set to cross 300,000 tonnes in2008-09, said Chairman of Indian Oilseeds& Produce Exporters Association(IOPEA). Lower output in Sudan andEthiopia has propelled the demand forIndian sesame seeds in the global market.

The production in both the countries hasfallen by 25% following damage to thecrop. However, Indias exportperformance in 2008-09 will also dependon production in some other Africancountries and China. New crop in thesecountries will start hitting global marketsby September, said former Chairman ofIOPEA. Apart from China, India exportssesame seed to West Asia and Latin American countries. Increased export demand has already startedshowing its impact on the prices of sesame seed. Recently, prices soared to a record level of Rs2,000 per20kg. This is the highest ever price recorded by the commodity. At present, the price is hovering aroundRs1, 700 per 20kg. Meanwhile, the area under sesame seed in the current season has increased three-fold.

OutlookSesame oil is known for reducing cholesterol and cardiovascular diseases. Sesame oil is popular in severalcountries such as India, Korea, China and Switzerland as cooking oil. There are few sesame by-productsthat are used by the pharmaceutical and ayurvedic organisations as ingredients in different products. Mostof the units are in the North and in Maharashtra; a few are in Andhra Pradesh. Since people are becomingmore conscious about health, the demand for this oil is increasing, as this oil is good for reducingcholesterol. As the production of sesame in India is sufficient to satisfy the domestic consumptiondemand, the left over sesame i.e., around 25% of the total production is exported to various importingnations of the world.

Major Players Sagar Interantional Utsav Overseas Private Limited Shyam Industries Satnam Overseas

Lala Jagadish Prasad and company Surajbala Exports Private Limited

Export Oriented Germany

Turkey Netherlands United States of America Greece

Hong Kong Israel China United Kingdom United Arab Emirates

Export of Sesame Oil & Its Fractions

0

100

200

300

400

500

2004-05 2005-06 2006-07 2007-08 2008-

09(April-

Dec)

Rsm

Source: DGFT; Cygnus Research


10/19



COMPANY SCAN

KOHINOOR FOODS LIMITED

Introduction

Kohinoor Foods Limited engages in the production and wholesale of various food products in India. Its products include basmati rice, pulses,ghee, coffee, cashews, milk powder, sugar, spices, curries, coconut powder, wheat, and ready to eat foodproducts. The company also offers ready to eat Indian curries, cook-in sauces, cooking paste, spices,seasonings, and frozen food. Kohinoor Foods markets its products through retail outlets, distributors,and stockists. It also has operations in the United States, the United Kingdom, Dubai, Canada, Japan,Australia, Singapore, and other European countries.

Strengthening the global distribution networkThe Kohinoor brand has already made an impression in the UK retail market and has become the No. 2brand in dry basmati in a very short time. It is one of the fastest growing brands in TESCO also capturesmore than 48% of the ethnic food shelves. The companys Basmati rice has now started exporting to 65countries.

The company has introduced branded basmati rice into the large and competitive Saudi Arabian marketwith the appointment of an exclusive distributor to market Kohinoor basmati rice. Indian food is wellreceived across the world now.

Companys Financial Performance At A Glance (Rs M)

Key Ratios At A Glance

2007-08 2006-07 2005-06 2004-05

Net Sales 6350.60 5892.30 5410.80 5036.00Operating Profit/Loss 847.80 610.40 517.40 392.60

OPM (%) 13.35 10.36 9.56 7.80

NPM (%) 0.84 3.75 3.98 3.07

Depreciation 103.90 104.00 84.00 57.90

Interest 691.10 198.20 155.80 119.70PAT 53.20 220.70 215.10 154.80Source: BSE India; Cygnus Research

KEY RATIOS

2007-08 2006-07 2005-06 2004-05

Debt-Equity Ratio 3.72 3.10 2.73 2.48

Long Term Debt-Equity Ratio 1.73 1.11 0.59 0.29Current Ratio 1.82 1.58 1.38 1.30

OPM (%) 13.35 10.36 9.56 7.80

NPM (%) 0.84 3.75 3.98 3.07

ROCE (%) 10.97 9.44 9.49 10.07RONW (%) 3.70 16.75 18.26 15.41Source: Company; Cygnus Research


11/19



Performance Analysis

During the 2007-08 review, turnover grew at a steady 8% YoY with net sales of Rs6,350.63m as againstRs5892.3m in FY07. This was largely driven by continued strategic focus on the branded and high value-added segments. Branded sales witnessed a robust growth of 23.62% to Rs4,533.6m from Rs3.667.4m inthe last financial year contributing to 71% of turnover.

With increased sales of high-margin branded basmati rice and foods segments, operating profit margins witnessed improvement. The EBIDTA margin (earnings before interest, depreciation, tax andamortisation) of the company increased to 13.35% in 2007-08 from 10.36% in the previous year.However, there was a decrease in Net Profit to Rs53.2m from Rs220.7m in 2006-07 due to an exceptionalitem.

Export MarketBranded basmati exports increased by 28.66% in 2007-08 to Rs1,405m from Rs1092m. The companymade a major breakthrough during the year by commencing export of Kohinoor branded basmati toSaudi Arabia, the largest market for basmati rice in the world with the appointment of a strongdistributor.

With the overseas offices in US, UK and Dubai; Kohinoor Foods is aggressively pursuing the mainstreammarkets in these regions. The companys Basmati rice has already entered the mainstream markets of US,UK, Australia, Switzerland, Mauritius, Romania and the Middle East. It has retailed across the world inprestigious stores like Tesco and Somerfield in UK, Coles and Woolworths in Australia, Metro andGlobus in Switzerland and Romania.

PERFORMANCE ANALYSIS OF KOHINOOR FOODS

Quarterly Performance Financial Year Performance

OND08 OND07 Var (%) 2007-08 2006-07 Var (%)

Sales 1471.60 1559.00 -5.61 6350.60 5892.30 7.78

Other Income 0.00 4.30 -100.00 21.00 25.80 -18.60

PBIDT 274.20 221.70 23.68 847.80 610.40 38.89Interest 260.40 81.30 220.30 691.10 198.20 248.69

PBDT -13.80 140.40 -109.83 156.70 412.20 -61.98

Depreciation 26.30 30.00 -12.33 103.90 104.00 -0.10PBT -40.10 110.40 -136.32 52.80 308.20 -82.87

TAX 4.50 27.50 -83.64 0.40 -87.50 -100.46

PAT -35.60 82.90 -142.94 53.20 220.70 -75.89

Source: Company; Cygnus Research

Operating Income

4.5

5.0

5.5

6.0

6.5

2004-05 2005-06 2006-07 2007-08

Rsb

n

Product Mix

Rice90% Soya-

bean

(Traded)

3%

Foods

7%

.

Source: BSE India; Cygnus Research


12/19



Raw Material Mix

Paddy

21%

Other Raw

Materials

77%

Ready To

Serve

Food 2%

Source: Company; Cygnus Research

Common Size Comparison

When we compare the Kohinoor Foods with RT Exports and Lakshmi Energy Foods, operationalperformance is moderately worst then its peers. In other income, Kohinoor stands in the last and the RTExports stands at the first. When we compare the other expenditure, Kohinoor stands at the middle of itspeers. Depreciation and tax charges are showing comparatively same for all the three companies.Financial expenses of the Kohinoor Foods shows comparatively high when compared to its peers.

Cost Structure

The overall cost structure consists of raw material expenses, manufacturing expenses, staff expenses,selling & administration expenses, power& fuel expenses, depreciation, interest &financial expenses and tax charges. Overallcost structure as a percentage of sales ofthe company has declined marginally from104.81% during 2006-07 to 114.06%during 2007-08 and registered a hike of925.22 basis points. Raw materialexpenses, manufacturing expenses, selling& administration expenses and interest

expenses accounted for the companysmajor cost. During 2007-08, over 2006-07,staff cost inflated by 31.53 basis points;Raw material expenses witnessed a hike of297.93 basis points; manufacturingexpenses increased by 97.46 basis points;depreciation expenditure declined by 12.89 basis points; interest expenditure went up by 751.87 basispoints and tax charges has gone down by 147.86 basis points.

Common Size ComparisonKohinoor Foods RT Exports Ltd Lakshmi Energy Foods

Net Sales 100.00 100.00 100.00Other Income 0.33 9.66 0.25Staff Expenses 2.10 1.66 0.43

Other Expenditure 8.14 18.30 1.92Depreciation 1.64 9.33 2.04Financial Expenses 10.88 3.79 3.23PBT 0.83 25.02 16.03 Tax Charges 0.01 0.08 5.46PAT 0.84 24.96 10.57


Cost Structure as Percentage of Operating Income

2007-08 2006-07 2005-06 2004-05

Raw Material Consumed 82.88 79.90 79.98 80.74Manufacturing Expenses 7.19 6.22 5.27 4.64

Staff Expenses 2.10 1.78 1.46 1.24

Selling & Administration Expenses 8.14 9.01 8.08 7.55

Power & Fuel Cost 1.22 1.28 1.33 1.36Depreciation 1.64 1.77 1.55 1.15

Interest 10.88 3.36 2.88 2.38

Tax Charges 0.01 1.48 1.16 1.20Source: Company; Cygnus Research


13/19



Stock Performance

Company stock price which was at Rs100.55 at the end of June 2008 has declined to Rs64.05 by May2009, because of poor performance of the company. During 52 week period consideration of the

company share registered a high of Rs120.25 on August 2008 and a low of Rs53.45 on March 2009. Themarket capitalisation of the company in June 2008 was Rs2.65 billion while in May 2009 it was onlyRs1.80 billion. The relative market capitalisation had declined by 31.99% in June 2008 as compared toMay 2009.

Recent Strategies The company is aiming to add at least another 25 countries to the list of customer countries in the

next two years in the food business.

OutlookA rapidly growing domestic economy with changing consumption patterns presents a huge opportunityfor the company going forward. The company is committed to build a global food brand and has drawnup a strategy to continue its focus on the branded foods business. It will continue to introduce new

products and penetrate new markets overseas.

Focus on branded business The company will continue its focus on branded product sales and capitalise on the high margin

convenience foods segment and believes that 90% of the turnover would come from the brandedsegment, basmati rice and food business by 2009-10 as compared to 71% in 2007-08.

Kohinoor Foods plans to increase its total market share in the domestic branded basmati marketfrom 38% to 42% by 2009-10 through aggressive and focused marketing strategies and expects togarner additional market share from a growing market.

It expects the food business to contribute 25% of our turnover by 2009-10.

Relative Market Cap

Performance

50

70

90

110

130

Jun-08

Jul-08

Aug-08

Sep-08

Oct-08

Nov-08

Dec-08

Jan-09

Feb-09

Mar-09

Apr-09

May-09

BSE

Kohinoor Foods

Shareholding Pattern

Promoter

s

35%

Public

16%

Others

42%Financial

Inst.

7%



14/19



STOCK SCAN

16 May-24 May 25 May-31 May 01 Jun-07 Jun 08 Jun-15 Jun

SENSEX

Weeks global cuesand profit-booking madeSensex registergain during thisperiod.

Investors RemainedBullish during thisperiod and buyingseen in the market.Sensex gainedduring this period.

Sensex ended inpositive note duringthis period onincreased capitalinflow by funds aftera positiveinfrastructure data.

Sensex gainedduring this periodas buying seenamid encouragingglobal cues.

LAKSHMI

This week shareprice increased by5.80% fromRs75.90 to

Rs80.30.

Increase in volumeof shares tradedresulted in the hikeof stock price from

Rs80.30 to Rs82.70.

Bullish sentimentsprevailed in themarket. Stock movedin tandem with BSE

Sensex.

Negative investorsentiments pushedthe share price tofall by 18.82%.

Relative Market Cap Performance

80

90

100

110

120

130

140

150

160

18-May

19-May

20-May

21-May

22-May

23-May

24-May

25-May

26-May

27-May

28-May

29-May

30-May

31-May

1-Jun

2-Jun

3-Jun

4-Jun

5-Jun

6-Jun

7-Jun

8-Jun

9-Jun

10-Jun

11-Jun

12-Jun

13-Jun

14-Jun

15-Jun

Sensex

LAKSHMIDABUR

Relative Market Cap Performance

90

100

110

120

130

140

150

18-May

19-May

20-May

21-May

22-May

23-May

24-May

25-May

26-May

27-May

28-May

29-May

30-May

31-May

1-Jun

2-Jun

3-Jun

4-Jun

5-Jun

6-Jun

7-Jun

8-Jun

9-Jun

10-Jun

11-Jun

12-Jun

13-Jun

14-Jun

15-Jun

Sensex

kohinoor foodsAGRO TECH



15/19



DABUR

This weekregistered negativetrend of 4.19%from Rs115.85 toRs111.00.

Negative investorssentiments madethe share price fallby 0.59%.

The share priceinflated by 2.90% asthe company has bigplans to launch a newbrand in the skin caresegment, which hasattracted theinvestors during thisperiod.

The share priceincreased by0.97%.

KOHINOOR

The share priceinflated by 18.51%as the company isplanning toachieve newmarkets andexpand itsassortment offood products todomestic market.

Share price gainedaround 9.96% as itmoved in tandemwith Sensex.

Lack of demand onshares made thestock price to fall by2.03%.

Negative investorssentiments madethe share price fallby 10.84%.

AGROTECH

The stock priceopened atRs115.10 andclosed atRs129.80,registeringincrease of12.77% due tobullish sentimentsin the market.

Positive investorssentiments pushedthe share price tomove up by 1.08%.

Share price gainedaround 11.74% as itmoved in tandemwith Sensex.

The share priceplummeted by14.46%.


16/19



UPCOMING EVENTS

1. Event ZAK India Agro Spices Processed Food Expo-DhakaDate Jul 09-11, 2009Venue Bangladesh-China Friendship Conference Centre, Dhaka

Highlights

It will showcase the Indian Agro, Spices & Processed Food products. Thisevent will provide an excellent platform for business to business contacts andhelp producers, manufacturers, importers & exporters to network with foodretail chains, super markets, convenience centers, grocery stores, hotels &restaurants, caterers and more.

Contact Details

ZAK Trade Fairs and Exhibitions Private Limited.49 (Old No. 27), Veerabadran Street,Nungambakkam, Chennai, India,Tel: +(91)-(44)-42959595; Fax: +(91)-(44)-28202728,E-mail: [email protected]

2. Event AgriFood Manufacturers & Producers ExpoDate Jul 19-21, 2009Venue Gallagher Convention Centre, 19 Richards Drive Midrand, Midrand

Highlights

Expo featuring the products, the ingredients and the processes that take agri-industries to market. Supported by the Agro-Processing division of SouthAfrica's Department of Trade and Industry, who host foreign buyers to theevent, the expo represents a showcase for the continent, allowing local,regional and international exhibitors to promote their products alongsideeach other to mutual benefit.

Contact Details

Exhibition Management Services.PO Box 650302, Benmore, South Africa.Tel: +(27)-(11)-7837250; Fax: +(27)-(11)-7837269E-mail: [email protected]; web: www.exhibitionsafrica.com

3. Event Foodex YemenDate Aug 09-23, 2009Venue Sanaa Expo Center, Sanaa

HighlightsFoodex Yemen is the largest platform for food and beverage companies toreach its end-consumer. Foodex Yemen can be very successfully utilised tolaunch new product, enchance brand positioning, have face to faceinteraction with consumers, and obtain instant market-feedback.

Contact DetailsApollo International Exhibitions. Sitteen Rode,Faj Attan, Post Box 15434,Sanaa, Yemen. Tel: +(967)-(1)-441000; Fax: +(967)-(1)-448086

4. Event Agricultural Food FairDate Aug 29-Sep 05, 2009Venue TBA, Gornja Radgona

Highlights

Agricultural Food Fair showcases all kinds of food processing and packagingmachines, materials, systems and products under one roof. This is the showwhere the public get to taste quality products and have the opportunity to

buy directly from the manufacturers. This is the unique opportunity to meetsenior buyers & decision makers from all facets of the user industry.

Contact Details

Pomurski Sejem d.d. Cesta na stadion,Gornja Radgona, SloveniaTel: +(386)-(2)-5642100;Fax: +(386)-(2)-5642160E-mail: [email protected]; Web: www.pomurski-sejem.si


17/19



5. Event Wine & Spirits Exhibition-PolandDate Sep 14-17, 2009Venue Poznan International Fair Grounds, Gogowska street 14 60-734 ,Poland

Highlights

Wine & Spirits Exhibition will continue to be a professional meeting placefor producers, exporters, importers and distributors of wine and spirits fromall over the world. The exhibitors will be offered tasting rooms. There will

also be expanded drinkware/glassware services.

Contact DetailsPoznan International Fair Limited. Glogowska Street 14, Poznan, PolandTel: +(48)-(61)-8692000; Fax: +(48)-(61)-8665827E-mail: [email protected]; Web: www.mtp.pl

6. Event Agri & Food Processing IndiaDate Sep 22-24, 2009Venue Bangalore International Exhibition Centre, Bangalore, Karnataka, India

Highlights

Agri & Food Processing India 2009 is one of India's rare agriculture and foodprocessing events, at this stage where agriculture and its related activitiesoffer the potential for an exponential growth display in the years to come.India is one of the largest agricultural economies, with the largest populationengaged in this primary sector.

Contact DetailsAdhesion Group. 35/37 rue des Abondances, Boulogne, France

Tel: +(33)-(1)-41864187; Fax: +(33)-(1)-460386267. Event Basel Wine Fair

Date Oct 24-01 Nov, 2009Venue Exhibition Center Basel, Basel, Basel-Stadt , Switzerland

Highlights

Basel Wine Fair - 2009 One of the largest wine fair in Switzerland, BaselWine Fair has become the leading commercial platform for boutique wineriesfrom around the world with limited-production wines available only in ahandful of fine restaurants and specialised retailers.

Contact DetailsM. C. H. Swiss Exhibition (Basel) Limited. Ch,Basel, SwitzerlandTel: +(41)-(61)-2062247; Fax: +(41)-(61)-2062189

8. Event Food Expo - OmanDate Oct 26-28, 2009Venue Oman International Exhibition Centre, Muscat, Oman

HighlightsFood Expo - Oman is the only show in Oman for the food and beverageindustry. It covers everything related to food processing and food technologyas well as catering, hospitality services, and agriculture.

Contact DetailsOmanexpo, LLC. P. O. Box 20, P.C 117 Wadi Kabir, Muscat Sultanate OfOman, Oman. Tel: +(968)-(24)-790333; Fax: +(968)-(24)-706276

9. Event Icecream ChinaDate Oct 28-31, 2009Venue Tianjin China International Exhibition Center, Tianjin, China

Highlights

Icecream China has been held on a yearly basis for ten years successfully. Asthis great event gained quite lots of No. 1 title, it has been regarded as miraclein the food and exhibition industry. Icecream China is well known by bothmanufacturers and suppliers of equipment and raw materials in frozen foodindusty and it is the most important event for them.

Contact DetailsTianjin Qilong Exhibition Service Co, Limited. 32 Youyi Road, Hexi District,Tianjin, India. Tel: +(86)-(20)-87033630


18/19



10. Event China Fisheries & Seafood ExpoDate Nov 03-04, 2009Venue Qingdao International Convention & Exhibition Center, Qingdao, China

Highlights

China Fisheries & Seafood Expo is a highly successful, establishedinternational exposition. Year after year, thousands of pre-qualified buyersand decision makers visit the show ready to do business. No other show of

its type in Asia comes close to matching the size or success of ChinaFisheries & Seafood Expo.

Contact DetailsSea Fare Expositions, Inc. 4250, 8th Avenue NW, Suite, Seattle, UnitedStates Of America. Tel:+(1)-(206)-7895741; Fax:+(1)-(206)-7890504

11. Event Food Processing & Packaging IndonesiaDate Nov 11-14, 2009

VenueJakarta International Expo ,Gedung Pusat Niaga Lt. 1 Arena PRJ Kemayoran, Jakarta, Indonesia

Highlights

Food Processing & Packaging Indonesia is where you can raise your profilein the industry and add value to your brands, locate new agents anddistributors for your products, launch a new product and generate mediainterest. Develop a personal and direct relationship with your clients, showyour full product range in real life rather than a catalogue, let buyers use all

five senses to gain a full appreciation of your product, get immediatefeedback on your product range.

Contact DetailsKrista Media Pratama PT. Krista Exhibitions, Jln.Blandongan 28 DG,Jakarta, Indonesia. Tel:+(62)-(21)-6345861; Fax:+(62)-(21)-6340140/6342113

12. Event FRUIT ATTRACTIONDate Nov 04-06, 2009Venue Feria de Madrid, IFEMA Feria de Madrid Feria de, Spain

Highlights

Fruit Attraction Exhibition is annual event. This is a unique platform for thefruit and vegetable industry, focusing the exhibitor participation in Spanishproducers and distributors, producers from Europe and the rest of the world,particularly from Latin America. The event will be held between 04-06 Nov2009 at Feria de Madrid.

Contact Details

Info IFEMA. Parque Ferial Juan Carlos I, Madrid, Spain.

Tel:+(34)-(91)-7223000; Fax:+(34)-(91)-722580113. Event SibProdMash

Date Dec 01-04, 2009Venue Siberian Fair , Novosibirsk, Russia

Highlights

SibProdMash is the leading part of this technology forum. It showcases allkinds of food processing and packaging machines, materials, systems andproducts under one roof. This is the unique opportunity to meet seniorbuyers & decision makers from all facets of the user industry.

Contact DetailsThe Siberian Fair, 220/10, Krasny Prospekt, Novosibirsk, Russia.Tel:+(7)-(3832)-106290; Fax:+(7)-(3832)-259845

14. Event Food & Life ExpoDate Dec 03-06, 2009Venue New Munich Trade Fair Centre, Munich, Germany

Highlights

Traditionally, the exhibition draws food and drinks makers of Germany as a whole providing the exhibitors with an excellent opportunity to show thelatest technologies and promote modern competitive equipment in themarket.

Contact DetailsGesellschaft Fur Handwerksmessen GmbH. Willy Brandt Allee, Munich,Germany. Tel:+(49)-(89)-949550; Fax:+(49)-(89)-94955239


19/19


15. Event India Foodex-BangaloreDate Dec 05-07, 2009Venue Palace Grounds, Bengaluru, India

Highlights

India Foodex-Bangalore is the International Exhibition on food products,Beverages, Food processing, Machinery, Food packaging machinery, Foodadditives, Dairy and Poultry, Meat, Processed food Products and

Technologies.Contact Details

Media Today Pvt Ltd. T-30, First Floor, Khirki Extention, Malviya Nagar,New Delhi, India.Tel:+(91)-(11)-26682045; Fax:+(91)-(11)-26680153

Agro-Processed Food - Cygnus - July 09

Documents

Transcript of Agro-Processed Food - Cygnus - July 09