HyFun Foods, which manufactures frozen potato products, will set up a new factory in northern Gujarat with an investment of about Rs 350 crore as part of its expansion plan and future growth strategy.
HyFun Foods, which has an existing plant in the Mehsana district of Gujarat, sells more than 25 ready-to-cook frozen snacks such as french fries, aloo tikki, burger patties and nuggets.
The Ahmedabad-based firm posted over 20 per cent growth in its turnover during the last fiscal to Rs 330 crore and is targeting to touch Rs 500 crore revenue in the financial year 2021-22.
"We are setting up a new plant in North Gujarat. The new facility will come up on 5-acre land, which is located close to our existing manufacturing unit," HyFun Foods Managing Director and Chief Executive Officer Haresh Karamchandani told PTI.
Asandas and Sons Pvt Ltd is the name of the company that market its products under HyFun Foods brand, he informed.
The annual processing capacity of potatoes will increase to three lakh tonnes from the current 1.25 lakh tonnes, he added.
"The construction work will start from the next month and the new plant will be ready by end of the next year," Karamchandani said.
Asked about investment on the new plant, he said it will be around Rs 350 crore. The company will fund the project cost through equity and debt.
Karamchandani said the new plant is being set up to focus on both domestic and export markets.
He highlighted that exports currently contribute around 70 per cent to its total turnover. The company mainly sells products in middle-east and south Asian countries.
Karamchandani noted that Gujarat is one of the leading producers of premium varieties of potatoes that are used for manufacturing french fries and other potato-based frozen products.
"There is a huge demand for frozen potato products in overseas as well as domestic markets," he said.
On strong demand, Karamchandani said the company's turnover is likely to touch around Rs 500 crore this fiscal year from Rs 330 crore in 2020-21.
Exports share will continue to be around 70 per cent.
India is emerging as an important supplier of frozen potato products in global markets, he said.
"With capacity expansion, we are targeting to reach Rs 1,500 crore revenue in the next five years," he said, while outlining a long-term growth plan.
In the domestic market, Karamchandani said the company sells products in retail markets under its own brands and also supplies to HoReCa (hotel, restaurants and canteens) as well as QSR (quick service restaurants) segments.
On sourcing of raw material, the company has tied up with around 2,700 farmers (across 13,000 acres) in the northern part of Gujarat for contract farming.
"We procure potatoes at Rs 9.25 per kg from farmers. The cost of production for farmers is Rs 5.5-6 per kg. So, we are paying remunerative prices to farmers," he said.
