New Delhi: Rising food inflation and mounting input costs in India would not affect sales revenue of Kohinoor Specialty Foods India, a top official of the company said on Tuesday.
Kohinoor Speciality Foods India is a 85:15 joint venture (JV) between US processed foods major McCormick & Co and leading Indian basmati rice exporter Kohinoor Foods.
“We are very optimistic that the expected sales revenue of $85 million in the first year of operations here would be achievable,” McCormick’s president and chairman Alan Wilson told reporters on being asked whether the company was hopeful of meeting its sales target despite rising food inflation.
Food inflation has touched a nine-month high at 12.21% for the week ended 22 October.
McCormick will target the growing packaged food business in the country, which will help the company maintain the sales momentum, added Wilson, who is also the chief executive officer (CEO) of McCormick.
Supporting Wilson, Kohinoor Speciality Foods managing director Satish Rao said that the company had identified a few product platforms like cooking ingredients (sauces, pastes, etc) and convenient foods (ready-to-eat food).
“We have so far invested $150 million in India and are conducting market-based research on the products portfolio, which will help us in achieving our sales target,” Rao said.
The joint venture is a part of McCormick’s strategy to expand sales in emerging markets, including India. McCormick expects emerging markets to contribute about 12% of total sales by 2015 from the present nine, Wilson said.
“This is a win-win situation for both McCormick and Kohinoor as packaged food market in India is expanding,” Kohinoor Foods Joint managing director Gurnam Arora said.
According to market experts, branded packaged food market in India is estimated to be worth about Rs 10,000 crore and is growing at around 15% annually.
Rice exporter Kohinoor Foods had announced in September this year the completion of Rs 520 crore deal with US-based spice maker McCormick to set up a joint venture for marketing Basmati rice and other food products in India.
The $3.3 billion McCormick manufactures, markets and distributes spices, seasoning mixes, condiments and other flavorful products. The company has so far launched about 700 products in around 100 countries.