Himalaya Food International, a player in the frozen and canned food processing segment, is rebuilding and reviving its french fries business, the company's chairman said on Monday.
The company is in the process of installation of the 50,000 tonnes per annum french fries line and 12,000 tonnes potato speciality line, which it targets to complete by December 2023 to catch up with the potato season starting March 2024.
"These lines have the potential to add Rs 700 crore to the top-line at full capacity," said Himalaya Foods International Ltd (HFIL) chairman Man Mohan Malik in a letter addressing shareholders.
HFIL earlier had a joint venture (JV) with Simplot USA. It has a dispute with the JV partner and the matter went to Singapore for arbitration.
According to reports, the American JV partner had claimed USD 14 million as refunds against the sale of the french fries line and specialty potato lines.
The tribunal has directed Simplot to return the equipments of french fries and potato specialty lines and HFIL to pay a total of USD 3.96 million.
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"Though we are confident to neutralise any claims raised by the failed JV partners due to their own repudiation of the Singapore award by defying the 'time bound' return of the machinery, we are geared up to generate and save funds for any adverse judgments," he said.
The company has settled debts with a consortium of banks by OTS (one-time settlement) to pay Rs 82.80 crore.
"We have already paid Rs 46.75 crore, including Rs 10 crore interim relief from the insurance company. We plan to pay the balance amount in the next four months and have aligned the balance claim amount from insurance and the proceeds from the sale of Rajasthan land to become debt-free company by October 2023," he said.
Now the immediate priority of Himalaya Food International is to strengthen working capital and generate resources from non-core assets and to execute a backlog of export orders.
"French fries and other fried and frozen potato products have a great demand in India and worldwide. Gujarat has become the hub for the exports of potato-based products due to massive contract farming and suitable climatic conditions," he said.
The whole of South-East Asia, Japan and the Middle East are sourcing french fries from Gujarat instead of traditional sources in Europe and North America.
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