Agro Processed Food

Industry Monitor
Agro-processed Food
Vol. 1108
August 2011
CONTENTS
INDUSTRY AT A GLANCE ....................................................................................................2 KEY DEVELOPMENTS ..........................................................................................................3 Marketing................................................................................................................................3 Mergers & Acquisitions...........................................................................................................4 Others.....................................................................................................................................5 INDUSTRY STATISTICS .........................................................................................................7 PRODUCT FOCUS ...................................................................................................................8 Edible Oil ...............................................................................................................................8 Overview ............................................................................................................................8 Classification .......................................................................................................................8
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Market Share & Imports .....................................................................................................8 Outlook ..............................................................................................................................9
COMPANY FOCUS ................................................................................................................10 Tata Global Beverages Ltd ....................................................................................................10 Introduction......................................................................................................................10 Cost Structure Analysis .....................................................................................................11 Stock Performance............................................................................................................12 Outlook ............................................................................................................................12 STOCK SCAN .........................................................................................................................13 UPCOMING EVENTS ...........................................................................................................14
Cygnus Business Consulting & Research Pvt. Ltd., 2011
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Industry Monitor Agro processed food
August 2011
INDUSTRY AT A GLANCE
Marketing S+S Inspection to launch two new inspection systems at PACK EXPO; USA Nilfisk Industrial Vacuums announces new three-phase vacuum cleaners; USA Endress+Hauser opens temperature instrumentation manufacturing plant in US; USA Nestle, Tata may be thirsty for Arizona tea; USA Health concerns drive dark and organic chocolate boom; Italy Fortress Metal Detection Systems Ensure Poultry Products of the Highest Quality; Nether lands AgroTech Foods enters ready-to-eat segment, launches rice-based Sundrop Yummeals; India Bihar becoming major milk producer; India Technology of making biscuits and bread from black rice transferred; India Amul ranked No.1 Indian brand; India Mergers & Acquisitions France's Groupe Danone to merge distribution in India with probiotic drinks joint venture; India Eureka Forbes to enter packaged drinking water market; India Others
Eriez combines US and Canadian sales organizations into North American Sales Team; USA Australian milk processors eyeing Indian market; India ITC rules out immediate price hike on food items; India Sugar-free, fat-free food PepsiCo, Parle forced to withdraw expansion plans; India French diary firm Danone to go slow on expanding in India; India Global coffee production estimated at 135 million bags; India
August 2011
KEY DEVELOPMENTS
Marketing
Americas USA: S+S inspection to launch two new inspection systems at PACK EXPO S+S Inspection will be demonstrating its broad contamination detection and removal capability. New products will include the totally redesigned RAYCON X-ray product inspection system using the latest low energy X-ray source and sophisticated image processing software to identify metallic and nonmetallic contamination, flavor clumps and missing components at a rate of up to 600 items per minute. The new RAYCON is ideal for end of line and in process inspection of a wide range of packed products, especially in the food industry where product inspection must be totally effective. Also new is the GHF tunnel metal detector shown mounted on the S+S SANICON conveyor system, an ideal configuration for use in a wide variety of metal detection applications. USA: Nilfisk Industrial Vacuums announces new three-phase vacuum cleaners Nilfisk Industrial Vacuums announces the launch of the Nilfisk CFM T Series. These three-phase, continuous duty vacuum cleaners meet the industrial demands of today's manufacturing facilities, who realize the importance of implementing a solid housekeeping plan to keep workers safe and productivity high. The T Series is comprised of the T26, T48 and T63. Constructed of heavy duty steel and polypropylene, these reliable machines feature solid construction and strong performance at an affordable price. Ideal for collection of powders, liquids, dust and debris, the vacuums are easy to use and maintain, even in the most challenging environments. USA: Endress+Hauser opens temperature instrumentation manufacturing plant in US Endress+Hauser officially opened a new Temperature production facility in Greenwood, Indiana, recently. The 12,000 sq ft manufacturing plant will build temperature sensors, thermo wells, transmitters, recorders, flow computers, safety barriers, displays and other instrumentation to meet the increasing demand for Endress+Hauser instrumentation in North America and South America. Sales of our ISIEmergingMarketsPDF uk-insead2 North195.101.240.126increased by 40% so far in 2011. The new facility temperature instruments in from America have on 2011-08-28 12:24:21 EDT. DownloadPDF. prepares Endress+Hauser to serve the growing demand, producing temperature instrumentation for the North American market, as well as products for export to South America. USA: Nestle, Tata may be thirsty for Arizona tea India's Tata Global Beverages and Nestle Ltd have, or have had in the past, an interest in acquiring US iced tea maker Arizona Beverage Co, according to Beverage Digest. At least two companies have had an interest in privately held Arizona Sources cited enterprise valuations for Arizona ranging from US$3 billion to US$4.25 billion, Beverage Digest. Nestle, which makes Sweet Leaf Tea and Nestea, is said to be one of the interested parties. Soft drink leader Coca-Cola Co, which lags rivals in the US tea market, was not mentioned by any sources as having a recent interest. Europe Italy: Health concerns drive dark and organic chocolate boom Sales of chocolate rose by nearly 19% in Italy in the four years up to 2010, driven by the trend towards premium, but also higher selling prices, finds a market review from Leatherhead. Increasing health concerns have also had an impact upon the Italian confectionery market, notes the UK research group. Italian consumers are displaying an increasing preference for dark chocolate, largely because of its health benefits, while sales of organic chocolate are also rising. With sales worth an estimated 3.49bn, the chocolate sector was the markets largest in value terms in 2010. Per capita consumption of chocolate and sugar confectionery has traditionally been low in Italy by Western European standards, under pressure from product sectors such as biscuits, comments the review. Netherlands: Fortress Metal Detection Systems ensure poultry products of the highest quality The people have produced poultry for discerning customers throughout the UK and Europe for more than 60 years. For the past five years its poultry processing plant at Hoogeveen has used high performance metal detection systems produced by leading UK designer and manufacturer, Fortress
August 2011
Technology, strengthening that relationship recently with an order for three additional machines. In order to maintain these high standards, need to ensure that their metal detection systems are accurate, fast and reliable and they have found that to be the case with the Phantom equipment from Fortress Technology. Each of the models supplied has been custom-made along with a conveyor system for this customer, with a variety of aperture sizes ranging from 350mm x 150mm to 550mm x 325mm. Asia-Pacific India: AgroTech Foods enters ready-to-eat segment, launches rice-based Sundrop Yummeals AgroTech Foods has entered into the ready-to-eat segment by launching rice-based Sundrop Yummeals. The ready-to-eat market is a fairly new concept, however, will soon be one of the fastest growing sectors in the India food retail sector and holds immense potential. AgroTech Foods already markets Sundrop Refined Oil, which is the largest brand in the premium segment of the refined oil consumer packs. Sundrop Yummeals will be aimed students who are staying away from their families and working professionals who are looking for quick and affordable healthy food options. The company has joined the likes of US spices and seasonings maker McCormick and Emami who are looking to expand their portfolio through ready to eat products. India: Bihar becoming major milk producer Bihar, which until recently was dependent on milk supply from Punjab and Andhra Pradesh to meet its domestic consumption, is turning out to be a frontline state in milk production. From a low average milk procurement of 281.81 thousand litre per day in 1999-2000, the state is now obtaining nearly 14 lakh litre per day milk from farmers in 2011-12. Bihar is among first 10 leading milk producing state of the country. Uttar Pradesh, Andhra Pradesh, Rajasthan, Gujarat, Madhya Pradesh, Maharashtra and Haryana are the other leading milk producing states. Bihar is targeting to increase its milk procurement to about 32 lakh liters per day by 2021-22 to further improve its ranking. India: Technology of making biscuits and bread from black rice transferred Central Institute of Post Harvest Engineering and Technology has transferred technology of making biscuits and bread from black rice, the variety which is widely consumed in China and is also known for ISIEmergingMarketsPDF uk-insead2 from 195.101.240.126 on 2011-08-28 12:24:21 EDT. DownloadPDF. for the its health benefits. With growing consciousness regarding health foods, entrepreneurs are looking opportunities by introducing products in the niche segment. The biscuits and bread developed from the black rice would be rich in anti-oxidants, fibre and anti-aging properties. That biscuits and bread developed from black rice also be useful for cancer patients due to presence of anti-oxidants. Black rice is unique grain and has lot of health benefits. India: Amul ranked No.1 Indian brand The Gujarat Cooperative Milk Marketing Federation owned Amul has been ranked the leading Indian brand in a study on Asia's top 1,000 brands. The study, by Campaign magazine published from Hong Kong and Singapore, has ranked Amul as the No 1 Indian brand for the third consecutive year. Amul is also ranked as the leading dairy brand, ahead of Asian rivals like Dutch Lady, Dumex and Magnolia. The survey was conducted in Australia, China, India, Japan, Korea, Hong Kong, Malaysia, Singapore, Taiwan and Thailand. Other Indian brands which find their way in the survey include Vijay Mallya-owned Kingfisher, Kishore Biyani's Big Bazaar, ICICI Bank, State Bank of India and leading telecom services provider Airtel.
Mergers & Acquisitions

Asia-Pacific India: France's Groupe Danone to merge distribution in India with probiotic drinks joint venture France's Groupe Danone is merging its distribution operations in India with its probiotic drinks joint venture Yalkult Danone India for better synergies, a year after it split with the Wadia Group. The joint distribution structure is expected to result in cost savings through shared cold-chain infrastructure and manpower efficiency. Both companies are building businesses in categories that are not established within the retail reality in India. The French foods giant that sells low-fat curd, flavoured yogurt and smoothies in India. As a three-month shared distribution experiment, Danone's products have been hitting retail stores together with Yakult, its joint venture probiotic drink, in Pune since last month.
August 2011
India: Eureka Forbes to enter packaged drinking water market Water purification appliances-maker Eureka Forbes is making a foray into the packaged water segment and will roll out the bottled water product on a pan-India basis by next year. They are foraying into the extremely competitive packaged drinking water market through the `franchise' route. The company will sell the product under the brand name AquaSure', in 20-litre and one-litre bottles, but has not divulged the prices. Eureka Forbes, which started the direct selling concept in India, has a 52% market share in the Rs150 billion water purifier segment, with its Aqua guard and AquaSure brands.
Others
Americas USA: Eriez combines US and Canadian sales organizations into North American sales team The integration of the sales and technical support of US and Canadian customers and sales representatives will help streamline and improve Eriez' overall operations. To support this integration it was promoted from National Sales Manager to the newly-created position of Director North American Sales. The company has expanded responsibilities including managing all sales efforts for the Light and Heavy Industry Markets in the US and Canada. The Director of Business Development, will manage all Eriez sales efforts for the Metalworking Market in both the US and Canada. This is an expansion of the previous duties that included managing Eriez' sales efforts for the Metalworking Market in the US Eriez is recognized as world authority in advanced technology for separation, vibratory and inspection applications. Asia-Pacific Australia: Australian milk processors eyeing Indian market Australian milk processing companies earn handsome profits by marketing their products in India, which is to be facing shortages of up to three million tonnes a year. India's National Dairy Development Board has forecast milk demand at 180-200 million tonnes by the end of 2020. Australian milk processors and trans-Tasman company Fonterra already has its eyes firmly on the prize. Australian dairy exports to India have soared 70% in the past 10 years, according to National Australia Bank. Indian exports are worth ISIEmergingMarketsPDF uk-insead2 from 195.101.240.126 on 2011-08-28 12:24:21 EDT. DownloadPDF.lactose, about US$200m annually to Fonterra, which supplies milk powder and pharmaceutical-grade among other dairy products. India: ITC rules out immediate price hike on food items Multi-business conglomerate ITC that makes food products under brands such as Sun feast and Bingo says that raw material costs are likely to go up by around 3% in the next 2-3 months, but ruled out any major price hike for consumers. While stating that raw material costs are under control at present, the company stated value added tax (VAT) on food items is a cause of concern. The company's products are not likely to become dearer for consumers in the near future. 90% of its products will not be impacted in terms of price hikes. India: Sugar-free, fat-free food PepsiCo, Parle forced to withdraw expansion plans Food marketers may be spending millions to woo the increasingly health-conscious modern day consumer by launching sugar-free and fat-free food. But in India taste matters more than calories as companies such as PepsiCo and Parle Products have learnt the hard way. Pepsi Max, PepsiCo's no-sugar, 'next-gen' cola, has sunk without a trace in less than a year of its launch in August 2010. And PepsiCo India has shelved expansion plans. The country's largest biscuit maker Parle Products too has withdrawn its baked chip brand Monaco Smart Chips. India: French diary firm Danone to go slow on expanding in India French diary firm Danone stated its priority to strengthen in the pockets where it currently operates rather than expanding across the country. After exiting from Indian confectionery firm Britannia in 2009, Danone has been trying to make its presence in India over the last one year, primarily in the diary market, which is dominated by Amul, Mother Diary and Nestle. India is a new and young market for us and believe that for India we have to adopt a specific strategy and have to be adapted locally. We are focused on strengthening our presence in the metros and understand Consumers. The Company is currently present in Mumbai, Pune, Hyderabad and Bangalore and will concentrate only in the four metros.
August 2011
India: Global coffee production estimated at 135 million bags World coffee production in 2011-12 season is estimated at 135 million bags of 60kg each on the back of record output of robusta in Brazil and Vietnam followed by a recovery in Columbia. World coffee production for 2011-12, is forecast at 135 million bags, down just 2.9 million bags as Brazil enters the offyear of the biennial arabica production cycle. According to the International Coffee Organization (ICO), the global body on coffee, output of the brew in the 2011-12 season is estimated at 130 million bags. Robusta crop in Brazil is expected to jump by 1.8 million bags to a record 14.5 million bags on account of favourable weather and good crop management, while the arabica crop is estimated to drop by 7.1 million to 34.7 million bags.
August 2011
INDUSTRY STATISTICS
Selected State-wise Production of Barley in India ('000 Tonne) States/UTs 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 Bihar 24.00 18.30 18.80 19.90 17.70 15.90 12.90 Chhattisgarh 4.30 3.20 3.20 3.00 3.80 3.10 2.40 Haryana 73.00 67.00 76.00 115.00 120.00 185.00 137.00 Himachal Pradesh 31.00 42.00 18.40 24.30 25.40 28.70 16.20 Jammu and Kashmir 8.20 10.00 4.00 7.00 8.40 7.80 7.90 Jharkhand 12.00 11.70 0.00 12.00 10.00 9.00 8.50 Madhya Pradesh 123.20 104.10 99.80 69.80 56.30 101.50 110.00 Maharashtra 1.00 1.70 2.00 1.00 1.00 1.00 1.30 Nagaland 10.00 7.00 7.30 0.00 0.00 0.00 0.00 Punjab 77.00 74.00 63.00 64.00 57.00 55.00 47.00 Rajasthan 408.80 417.70 492.10 591.70 539.00 878.40 619.80 Sikkim 1.50 1.50 1.40 1.40 0.70 1.30 1.20 Uttar Pradesh 485.40 411.70 413.40 386.00 327.90 376.00 362.00 Uttarakhand 34.00 33.00 18.00 30.00 26.00 22.00 26.00 West Bengal 4.10 4.00 3.00 2.60 2.70 4.20 2.40 Delhi 0.10 0.20 0.20 0.20 0.20 0.20 0.10 India 1297.6 1207.1 1220.6 1327.9 1196.1 1689.1 1354.7
Source: India stat, Cygnus Research
Selected State-wise Production of Barley in India

ISIEmergingMarketsPDF uk-insead2 from 195.101.240.126 on 2011-08-28 12:24:21 EDT. DownloadPDF. 780 2008-09 2009-10
380
('000 Tonne)
-20 Rajasthan Uttarakhand Jharkhand Punjab Bihar Chhattisgarh Maharashtra Haryana Sikkim Delhi J&K MP UP HP WB
Source: India stat, Cygnus Research
August 2011
PRODUCT FOCUS
Edible Oil
Overview
India is one of the largest producers of oilseed in the world and this sector holds an important position in the agriculture sector. Total oil seeds production for FY2009-10 is estimated at 31.7 million tons of nine cultivated oilseeds. India contributes about 6-7% of the worlds oilseed production and it accounts for around 6.4% of the world oil meal exports.
Classification
The different agro climatic zones in India have helped with the cultivation of wide variety of oilseeds. The different seeds being grown here are: Conventional Oils: Groundnut, mustard, sesame, safflower, linseed, niger seed are the major traditionally cultivated oilseeds. Soyabeen and sunflower have also gain importance in recent years. Among the plantation crop Coconut scores highest amongst all. Non-Conventional Oil: Ricebran oil and cottonseed oil are most important. Oilseeds of tree and forest origin growing mostly in tribal inhabitant areas are also significant source of oil. Consumption Consumption of oil in India varies according to the region as each of them has got specific preference for certain oil depending on the availability. While South has got heavy preference for Coconut and Sesame ISIEmergingMarketsPDF uk-insead2 fat consumers and therefore Vanaspati 12:24:21 preferred there. Vanaspati oil, North Indians are hard from 195.101.240.126 on 2011-08-28 is highly EDT. DownloadPDF. which plays important role in our Edible oil economy has production of about 1.3MT annually and has around 15% share of the edible oil market. Besides this newer oil which was not Companies known before like cottonseed, sunflower, palm oil, ricebean and soyabean have ITC entered the kitchen. Marico Ruchi Soya Major Players In the edible oil market ITC dominates the market followed by Marico, ITC, Dhara K S Oil Ruchi Soya, Dhara and KS oils ltd.
Market Share & Imports

Indian Edible Oil Market
Source: Company site, Cygnus Research
Imports Of Edible Oil
Mustard oil, 25% C rude oil, 70%
Palm oil, 17%
Sun flower oil, 10%
Other oils, 85%
Soya bean oil, 13%
Source: KS Oils ltd, Cygnus Research
August 2011
The Indian oil market is dominated by mustard oil which alone accounts 20% of the whole Edible market, while Other Edible has 80% coverage of the market. As the domestic production is not sufficient to meet the demand of the consumers India has to import oil from other nations. During the period Nov10-Oct11 India imported 9.18m MT. The imported oils mainly constitute crude and refined palm oils from South-East Asia and Soya Degummed oil from South America. Crude palm oil (70%) and Refined palm oil (17%) imports together accounts 23% of the total imports. Edible oils strengthen on millers buying support Edible oil prices strengthened up to Rs50 per quintal on the wholesale oils and oilseeds market today on increased off take by vanaspati millers, amid a firming global trend. Buying activity in edible oils picked up as palm oil climbed in overseas markets after stockpiles in Malaysia, the second-largest producer, dropped for the first time in six months in July when exports advanced to a record and output declined. Meanwhile, palm oil futures for the October contract increased by 0.9% to US$984 per tonne on the Malaysia Derivatives Exchange. In the national capital, sesame and cottonseed mill delivery (Haryana) oils rose by Rs55 and Rs25 to Rs6,250 and Rs6,550 per quintal, respectively.
Outlook
India is a leading player in edible oils, being the worlds largest importer. Edible oils have a high penetration of 90% in India. A growing population, increasing rate of consumption and increasing Per capita income are accelerating the demand for edible oil in India. India is fortunate in having a wide range of oilseed crops grown in its different agro-climatic zones. Groundnut, mustard/rapeseed, sesame, safflower, linseed, Niger seed/castor are the major traditionally cultivated oilseeds. Edible oil sector mainly backed by the increased demand supported by the Indias growing GDP. The demand is expected to increase from current level of 12.8MT to 16.6MT in 2010-11 and 22.5 MT by 2015. The companies with conservative hedging and inventory policy, strong raw material sourcing arrangements and geographically dispersed plant should have a stable credit profile in year 2010-11.
August 2011
COMPANY FOCUS
Tata Global Beverages Ltd
Introduction
Tata Tea Group of Companies setup in 1964 as a joint venture with UK based James Finlay represents the worlds second largest global branded tea operation. The group which holds its presence in 40 nations is among the first multinational companies. The company and its subsidiaries have been focusing on branded product in tea with a significant presence in plantation activity in India and Sri Lanka. Tata Tea Group contributes around 86% of its consolidated turnover with remaining 14% coming from Bulk Tea, Coffee and Investment Income. Headquarter of the company is in Kolkata and owns 27 tea estates in the states of Assam and West Bengal in eastern India and Kerla in South. Associate Companies: Tata Tea Inc.: Tata Tea Incs production facility is located on 4.5 acre plot in Plan City, Florida. The production facility is well equipped with spray dryer, blender, micro-milling machine and bulk jar packing lines. The production capacity of the facility was doubled in 1994 in order to serve more customers. The company has manufactured and supplied to customers more than 40 different instant tea products. The company was awarded, the Plant City Industry of the year award by the Greater Plant City Chamber of Commerce in year 1994. Tata Coffee Ltd.: It is the largest Coffee Plantation Company in Asia with estates located in Coorg, Hassan & Chickmagalur district of Karnataka. The current area under Coffee is around 8000 hectares producing over 9000 Metric Tonnes of Coffee annually. Both the Robusta and Arabica varieties of coffee are grown in the estates. The Curing Work unit at Kudige near Kushalnagar in the state of Karnataka with a production capacity of 22000 MT per annum has been awarded the prestigious certificate of ISIEmergingMarketsPDF uk-insead2 from 195.101.240.126first 2011-08-28 12:24:21 EDT. get such certification. Approval for Quality Standard ISO9002 and is the on Curing Industry in Asia to DownloadPDF. The production capacity of the company has been augmented to the extent of 2500MT. Company's Performance at a Glance 2010-11 2009-10 18114.10 17156.10 2719.20 5528.10 15.01 32.22 9.97 22.82 123.60 123.20 291.80 450.60 1805.90 3914.70 KEY RATIOS 2010-11 1.29 0.24 1.29 15.01 9.97 9.22 8.78 2008-09 13792.50 2883.10 20.90 11.53 106.50 486.00 1590.60 2007-08 11534.30 4423.80 38.35 27.12 101.70 463.50 3128.60
Net Sales Operating Profit /Loss OPM (%) NPM (%) Depreciation Interest PAT
Source: BSE India, Cygnus Research
Debt-Equity Ratio Long Term Debt-Equity Ratio Current Ratio OPM (%) NPM (%) ROCE (%) RONW (%)
Source: Company website; Cygnus Research
2009-10 1.31 0.15 1.31 32.22 22.82 13.29 19.04
2008-09 1.76 0.18 1.76 20.90 11.53 15.46 8.98
10

Performance Analysis AMJ 11 5194.60 64.60 1762.40 14.90 1747.50 30.50 1717.00 72.10 1644.90 Performance Analysis AMJ 10 Var (%) 4540.10 14.42 53.00 21.89 607.30 190.20 70.30 (78.81) 537.00 225.42 31.40 (2.87) 505.60 239.60 144.10 (49.97) 361.50 355.02 2010-11 18114.10 1028.80 2719.20 291.80 2427.40 123.60 2303.80 497.90 1805.90 2009-10 17156.10 1212.30 5528.10 450.60 5077.50 123.20 4954.30 1039.60 3914.70
August 2011
Sales Other Income PBIDT Interest PBDT Depreciation PBT TAX PAT
Var (%) 5.58 (15.14) (50.81) (35.24) (52.19) 0.32 (53.50) (52.11) (53.87)
Source: BSE India, Cygnus Research
Net Sales for the year at R18114.10m are higher than the prior year by 5.58% reflecting the impact of higher unit price realization on the food products where higher commodity prices were passed on to the consumer and a mix of price and volumes for the Ethnic foods portfolio as a consequence of margin improvement program. Steady improvement in profitability continued with profit after tax up by 25% versus previous year and profit before tax up by 17.88% when compared to the previous year. During the quarter AMJ11 the Company sales
20000
Revenue Performance
15000 Rs mn
ISIEmergingMarketsPDF uk-insead2 from 195.101.240.126 10000 on 2011-08-28 12:24:21 EDT. DownloadPDF. have been increased by 14.42% which was at 2007-08 2008-09 2009-10 2010-11
Rs5194.60m when compared to the last quarter of the same year. Other income has been Source: BSE India; Cygnus Research increased by 21.89% when compared to the last quarter which was at Rs64.60m. Depreciation, Tax, Net profit has been increased when compared to the previous quarter of the same year AMJ10. In the quarter AMJ11 PBT has been increased by 239% when compared to the AMJ10.
Cost Structure Analysis

In the year 2010-11 the raw material cost has been increased by 230 bp when compared to the previous year. Staff cost has been increased by 30bp. The company other expenditure has been increased by 914 bp. Interest has been increased by 101 bps when compared to the previous year
Cost Structure as Percentage of Operating Income 2010-11 2009-10 2008-09 2007-08 Raw materials 60.24 57.93 56.99 47.62 Staff cost 5.23 5.54 6.65 6.23 Other Expenditure 27.85 18.70 26.33 18.29 Depreciation 0.68 0.72 0.77 0.88 Interest 1.61 2.63 3.52 4.02 Tax 2.75 6.06 5.08 6.33
Source: BSE India; Cygnus Research
11
August 2011
Common Size comparison Tata global beverages ltd when compared to its Common Size Comparison for 2010-11 (% of Sales) peers Mcleod Russel and Tata coffee the raw Tata Mcleod Tata Cofe material consumption for Tata Global Other Income 5.68 1.30 5.08 Beverages ltd is comparatively high as a 60.24 8.02 20.31 percentage of sales. Staff expenses of the Raw Materials Staff Expenses 5.23 35.51 22.97 company are lower when compared to its peers 27.85 10.54 34.13 Mcleod and Tata Cofee. Other expenditure of Other Expenditure Depreciation 0.68 2.49 3.01 the company is 27.85% of sales which is 1.61 1.66 1.30 relatively less when compared with Tata Coffee Interest 2.75 4.47 3.37 which is 34.13% and Mcleod Russel with Tax 9.97 21.02 13.71 10.54% tax paid by the company is 2.75% as PAT percentage of sales which is relatively low Source: BSE India; Cygnus Research when compared with its peers Mcleod and Tata coffee. Though sales wise Tata Global Beverages is performing well, coming to the PAT Mcleod is leading in making the profit by 21.02% Rs2322.30m as a percentage of sales and followed by Tata Global Beverages and Tata Coffee.
Stock Performance
150
Relative Market Cap

BSE Sensex Tata
Shareholding Pattern
110
Promoters 35.24%
Public 64.76% ISIEmergingMarketsPDF uk-insead2 from 195.101.240.126 on 2011-08-28 12:24:21 EDT. DownloadPDF. 70 Jan '11 Oct '10 Mar '11 Sept '10 May '11 Dec '10 Aug '10 Feb '11 Nov '10 July '10 Apr '11 Jun '11
The companys stock price which was at Rs116.15 at the end of July 2010 has increased to Rs124.45 by October 2010 because of positive sentiments in the market due to industry recovery of the stock market and good performance of the company. The 52-week high seen in the month of October 2010 was at Rs124.45 and a 52-week low was at Rs89.15 in the month of Feb 2011. Major part i.e. 64.76% of the companys stake is with Public and the remaining 35.24% is in the hands of Promoters.
Outlook
In future the company is interested on new product and process development to meet the global growth agenda, packaging development, sustainability initiatives, and technical support to ensure product compliance in different geographies and working with the trade to develop new regulations and improve capabilities for compliance. The new product and process improvement programme covers tea, coffee and tea based liquid beverages and includes working with healthy ingredients, ingredient companies, collaborative projects and investigation of opportunities for collaboration with companies globally. A key area of development was that of beverages using ingredients beneficial to health which also includes herbs, extracts and other healthy ingredients. The technical support and audit programme provides data on product and packaging to monitor conformance to quality requirements. R&D will continue to develop a portfolio of new products and processes targeting products with focus on health and nutrition.
12
August 2011
STOCK SCAN
BSE Sensex 105 LAKSHMI DABUR
Relative Market Cap Performance
95
85 16/06/11 17/06/11 20/06/11 21/06/11 22/06/11 23/06/11 24/06/11 27/06/11 28/06/11 29/06/11 30/06/11 01/07/11 04/07/11 05/07/11 06/07/11 07/07/11 08/07/11 11/07/11 12/07/11 13/07/11 14/07/11 14/07/11 15/07/11 15/07/11
Relative Market Cap Performance
105 BSE Sensex Kohinoor Foods AGRO TEC H 85 16/06/11 17/06/11 20/06/11 21/06/11 22/06/11 23/06/11 24/06/11 27/06/11 28/06/11 29/06/11 30/06/11 01/07/11 04/07/11 05/07/11 06/07/11 07/07/11 08/07/11 11/07/11 12/07/11
95
Index BSE (Points) Lakshmi (Rs) Dabur (Rs) Kohinoor Foods (Rs) AGRO TECH (Rs) Index BSE (Points) Lakshmi (Rs) Dabur (Rs) Kohinoor Foods (Rs) AGRO TECH (Rs)
1st Week (16-23 June 2011) Opening Closing Var(%) 17,985.88 17,727.49 -1.44 42.00 36.85 -12.26 118.65 113.45 -4.38 51.05 45.55 -10.77 385.25 364.60 -5.36
2nd Week (24th June - 30th June 2011) Opening Closing Var(%) 18,240.68 18,845.87 3.32 37.60 39.65 5.45 113.80 114.05 0.22 46.55 49.95 7.30 370.65 383.60 3.49 4th Week (7-15th July 2011) Opening Closing Var(%) 18,858.04 18,561.92 -1.57 38.05 37.10 -2.50 111.75 111.75 0.00 51.35 51.20 -0.29 379.20 380.05 0.22
3rd Week (1st July - 6th July 2011) Opening Closing Var(%) 18,762.80 19,078.30 1.68 40.50 38.50 -4.94 116.45 113.40 -2.62 50.60 50.70 0.20 385.30 381.90 -0.88
13/07/11
13
August 2011
UPCOMING EVENTS
World Food Expo Aug 3-6, 2011 World Trade Center Metro Manila, Manila, Philippines World Food Expo brings together under one roof the many different types of food, beverages, and other related products from all around the globe. Together with its line-up of top-grade seminars and innovative approach to expositions, the event offers an excellent opportunity to see and be seen. Contact Premier Events Plus Group, Inc., Details Tel:+(63)-(2)-9297993; Website: www.worldfoodexpo.com 2. Event Food Tech India Date Sep 09-11, 2011 Venue Netaji Indoor Stadium Kolkata, West Bengal, India Highlights It is the International Exhibition on food products, food processing, grain milling and Hotel & Food Service. Contact N. K. Kapur & Company (Private) Limited, C -151 A, Mayapuri Industrial Area, Details Phase 2nd, New Delhi - 110 064., India; Tel: +(91)-(11)-28117927; Fax: +(91)-(11)-28117930 3. Event International Food Processing Summit Date Sep 14, 2011 Venue New Delhi Le Meridien New Delhi, Delhi, India Highlights The Summit cum Exhibition shall be attended by Senior Industry representatives and experts from all over the world. Together they will offer perspectives on bringing new innovations to the food processing sector along with exploring possibilities for investments to increase trade and strengthen global food security. Contact Assocham Corporate Office, 1, Community Centre Zamrudpur Kailash Colony, ISIEmergingMarketsPDF uk-insead2 from 195.101.240.126 on 2011-08-28 12:24:21 EDT. DownloadPDF. Details New Delhi - 110 048., India.; Tel: +(91)-( 11 )-46550581; Fax: +(91 )-( 11 )-46536481 Event Food Ingredients Asia Date Sep 21-23, 2011 Venue Queen Sirikit National Convention Center (QSNCC), Bangkok, Thailand Highlights It is gateway to the ASEAN region with the exhibition alternating between Indonesia and Thailand. South East Asia is fast becoming a major market in the future of the food ingredients industry. This source for high quality ingredients and growing consumer market is now the destination for the industry's key players. Contact Mr. Vincent Brain503/23 K.S.L. Tower, 14th Floor Sri Ayuthaya Road, Kwaeng Details Thanon Phayathai Khet Rajathewee, Bangkok, Thailand Tel:+(66)-(2)-6426911, Fax:+(66)-(2)-6426919/6426920 4. Event Food Ingredients India Date Oct 3-4, 2011 Venue Bombay Exhibition Centre(BEC), Mumbai, India Highlights This is part of the world wide series of Fi Events held in Europe and Asia. Indian food and beverage market is expanding rapidly and expected to touch US$330 billion by 2013. Fi has been instrumental in sensitizing the fraternity and enabling newer and higher volumes of businesses around the globe and with a view to penetrate deeper, Contact Mr. Jimesh Patel, 615-617 6th Floor, Sagar Tech Plaza A, Andheri Kurla Road Saki Details Naka Junction, Andheri East, Mumbai, India Tel: +91-22-66122683, Mob: +919820756210, Tel: +(91)-(22)-66122648/66122600, Fax: +(91)-(22)-66122626 1. Event Date Venue Highlights
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5. Event Date Venue Highlights
August 2011
6.
FoodTech ProdMashExpo Oct 5-7, 2011 Odessa Sea Commercial Port Exhibition complex, Odessa, Ukraine It is a leading specialized exhibition in the South Ukrainian region with regard to the exposition of technologies and equipment for agricultural products' processing and food products' production, to the quantity and composition of visiting stuff, to the efficacy of the business contacts and the richness of actions. Contact Mr. Inna Zinskaya, Office 1, 7, Marazlievskaya Street, Odessa, Ukraine Details Tel: +380-48-2371737, Tel:+(380)-(48)-7286494, Fax:+(380)-(48)-7286494 Event Food Pro Date Oct 21 23, 2011 Venue Chennai Trade & Convention Centre Chennai, Tamil Nadu, India Highlights The Food sector continues to rely heavily on technology and new developments. Such developments are crucial to the food processing industry, and it will be ideal place to do so, because its cross-over concept covers everything from manufacturing and processing of foods, to packaging, storage and retailing with a process orientation and cross-sector approach. Contact Confederation of Indian Industry, Chennai, 98/1, Velacherry Main Road, Guindy, Details Chennai - 600 032., India.; Tel: +(91)-(44)-42444555; Fax: +(91)-(44)-42444 510
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Industry Monitor

Market Share & Imports .....................................................................................................8 Outlook ..............................................................................................................................9

Cygnus Business Consulting & Research Pvt. Ltd., 2011

Industry Monitor Agro processed food

ISIEmergingMarketsPDF uk-insead2 from 195.101.240.126 on 2011-08-28 12:24:21 EDT. DownloadPDF.

Cygnus Business Consulting & Research Pvt. Ltd., 2011

Industry Monitor Agro processed food

Cygnus Business Consulting & Research Pvt. Ltd., 2011

Industry Monitor Agro processed food

Mergers & Acquisitions

Cygnus Business Consulting & Research Pvt. Ltd., 2011

Industry Monitor Agro processed food

Cygnus Business Consulting & Research Pvt. Ltd., 2011

Industry Monitor Agro processed food

ISIEmergingMarketsPDF uk-insead2 from 195.101.240.126 on 2011-08-28 12:24:21 EDT. DownloadPDF.

Cygnus Business Consulting & Research Pvt. Ltd., 2011

Industry Monitor Agro processed food

Selected State-wise Production of Barley in India

Source: India stat, Cygnus Research

Cygnus Business Consulting & Research Pvt. Ltd., 2011

Industry Monitor Agro processed food

Market Share & Imports

Source: Company site, Cygnus Research

Imports Of Edible Oil

Mustard oil, 25% C rude oil, 70%

Palm oil, 17%

Sun flower oil, 10%

Other oils, 85%

Soya bean oil, 13%

Source: KS Oils ltd, Cygnus Research

Cygnus Business Consulting & Research Pvt. Ltd., 2011

Industry Monitor Agro processed food

Cygnus Business Consulting & Research Pvt. Ltd., 2011

Industry Monitor Agro processed food

Source: BSE India, Cygnus Research

2009-10 1.31 0.15 1.31 32.22 22.82 13.29 19.04

2008-09 1.76 0.18 1.76 20.90 11.53 15.46 8.98

Cygnus Business Consulting & Research Pvt. Ltd., 2011

Industry Monitor Agro processed food

Source: BSE India, Cygnus Research

Cost Structure Analysis

Cygnus Business Consulting & Research Pvt. Ltd., 2011

Industry Monitor Agro processed food

Relative Market Cap

Source: BSE India; Cygnus Research

Cygnus Business Consulting & Research Pvt. Ltd., 2011

Industry Monitor Agro processed food

Relative Market Cap Performance

Relative Market Cap Performance

Source: BSE India; Cygnus Research

Cygnus Business Consulting & Research Pvt. Ltd., 2011

Industry Monitor Agro processed food

Cygnus Business Consulting & Research Pvt. Ltd., 2011

Industry Monitor Agro processed food

ISIEmergingMarketsPDF uk-insead2 from 195.101.240.126 on 2011-08-28 12:24:21 EDT. DownloadPDF.

Cygnus Business Consulting & Research Pvt. Ltd., 2011

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