on Nov 08, 2021)Mumbai: Billionaire industrialist Gautam Adani will be pouring more resources into acquisitions as he doubles down on his bet on the food staples business. He plans to buy manufacturing facilities in food staples and expand them — a playbook he followed in the edible oil business, which today commands a dominant share of India’s organised market.
Most of the edible oil refineries his JV company Adani Wilmar owns are buyouts and the company already has ideas to beef up its presence in food staples that includes wheat flour, rice, pulses, ready-to-cook and ready-to-eat products. “We intend to spend about Rs 500 crore on acquisitions of production units in food staples to turn the company into a large player in this industry,” said Adani Wilmar CEO Angshu Mallick.
An equal joint venture between the Ahmedabad-based billionaire and Singaporean agri-business company Wilmar, the India unit is among the nation’s largest FMCG players with a revenue of Rs 37,115 crore in fiscal 2021. Rivals
and clocked revenues of Rs 48,151 crore and Rs 45,311 crore. Edible oils contribute most to Adani Wilmar’s revenue followed by industrial essentials (like castor oil and oleochemicals) and food staples. “Our focus is on food staples for the next five years, driven by the industry’s high growth rates, among other factors,” said Mallick. “Our history suggests that we are good at acquisitions and this will remain our core strategy to expand our food staples’ play.”
To fuel growth, Adani Wilmar will be raising capital through the primary market. Of the planned Rs 4,500-crore IPO, Rs 500 crore will be spent on acquisitions in the food staples business, while the rest will be used to retire debt and to expand current capacities. Adani and Wilmar owner Kuok Khoon Hong — the 12th wealthiest person from Singapore — will not sell any stake in the FMCG company’s IPO.
While the kitchen staples — including sugar — and industrial essentials businesses are routed through Adani Wilmar, the Singaporean partner also has separate interests in India. Wilmar owns a majority stake in the publicly listed Shree Renuka Sugars. Further, Adani and Wilmar have an understanding that the Indian JV will not have a play in countries where the latter has a direct presence.
