Adani targets expansion of staple food trade

Mumbai: Billionaire industrialist Gautam Adani will devote more resources to acquisitions as he doubles his stake in the staple food sector. He plans to purchase and expand basic food manufacturing facilities – a scenario he has followed in the edible oils industry, which today holds a dominant share of India’s organized market.
Most of the edible oil refineries owned by his company JV Adani Wilmar are takeovers and the company already has ideas to strengthen its presence in staple foods which include wheat flour, rice, legumes, ready products. to cook and ready to eat. “We intend to spend around 500 crore rupees on the acquisition of basic food production units to make the company a significant player in this industry,” said CEO Adani Wilmar, Angshu Mallick.
A 50/50 joint venture between the Ahmedabad-based billionaire and Singaporean agribusiness company Wilmar, the Indian unit is one of the country’s largest FMCG players with a turnover of Rs 37,115 crore over the course of FY 2021. Rivals ITC and Hindustan Unilever recorded revenues of Rs 48,151 crore and Rs 45,311 crore. Edible oils contribute the most to Adani Wilmar’s income, followed by industrial commodities (like castor oil and oleochemicals) and staple foods. “We are focusing on staple foods for the next five years, due to the industry’s high growth rates, among other factors,” Mallick said. “Our history suggests that we are good at acquisitions and this will remain our core strategy to expand the game of our core products.”
To fuel growth, Adani Wilmar will raise capital in the primary market. Of the planned IPO of Rs 4,500 crore, Rs 500 crore will be spent on acquisitions in the staple food sector, while the remainder will be used to repay debt and increase current capacity. Adani and Wilmar owner Kuok Khoon Hong – Singapore’s 12th richest person – will not sell any stake in the FMCG company’s IPO.
While kitchen staples – including sugar – and essential industrial goods pass through Adani Wilmar, the Singaporean partner also has distinct interests in India. Wilmar owns a majority stake in Shree Renuka Sugars, a publicly traded company. In addition, Adani and Wilmar understood that the Indian JV will not have any intervention in countries where the latter has a direct presence.
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