Heritage Foods, promoted by the family of Andhra Pradesh chief minister N Chandrababu Naidu, targets revenue of Rs 6,000 crore in the next five years for which it now wants to expand its presence in all major states. It has entered north India with the acquistion of Reliance’s dairy business.
The company had reported sales of Rs 2,380 crore in year 2015-16 and it is growing at 22 per cent CAGR. The turnover in 2016-17 may exceed Rs 3,000 crore.
Heritage Foods’ executive director Brahmani Nara, who was in New Delhi to formally announce the company’s entry into the northern market, declined to disclose the investment plan. However, she said Heritage Foods would continue with the current rate of capital expenditure (between Rs 75 crore and Rs 100 crore) in procurement and processing.
She said: “There may be more investment in marketing as we are focusing a lot more on re-branding ourselves with improved designs, packaging etc.”
The company is in talks with an international firm for a joint venture to launch products in the curd segment and an announcement is expected in the next few months. “I am really excited about initiating newer value-added products through joint venture agreements with international partners and bringing about a national presence for the company in India,” she said.
The company has entered the northern region market with the promise to deliver freshest milk to the consumers and is hopeful of the achieving the target by 2022. She said the milk supplied in Delhi will be collected from farmers located just five hours away to ensure its freshness and quality.
Heritage Foods recently announced the acquisition of dairy business of Reliance Retail and hived off its bakery products to Future group. It will offer entire range of milk and milk products such as curd, butter, buttermilk and ice cream. Dairy accounted for 75 per cent of its total sales in 2015-16.
Nara said that her company’s products would be competitive with others like Amul and Mother Dairy. After the acquisition from Reliance, Heritage has now entered Punjab, Uttarakhand, Madhya Pradesh, Himachal Pradesh and Uttar Pradesh.
The company currently operates 15 milk plants in 15 states, processing 14 lakh litres per day. Currently 24 per cent of its revenue comes from value-added products like curd, butter milk, flavoured milk, etc. and additional 8 per cent only from fat products like butter, cheese, etc. taking the total to 32 per cent.
The company targets to raise this 24 per cent share to 40 per cent in next five years, she said. “We are penetrating in existing
markets and entering new markets where we see high potential for Heritage,”
she added.
