NEW DELHI: In the first of its kind acquisition of a foreign foods firm by an Indian company, LT Overseas — which owns the ‘Daawat’ brand of basmati rice — has bought the US-based Kusha Inc lock, stock and barrel. The acquisition was made through LTO NA, a wholly-owned US subsidiary of LT Overseas.
The rice industry in the US is currently worth around $80 million and is growing 20% year-on-year. Kusha Inc, promoted by Sam Nayyer, is an established brand in Southern California with a revenue of around $40 million. It imports premium quality basmati rice from several countries in the Asian market including India.
Following the $20-million acquisition, the Daawat group’s share in the US retail market will increase from 7% to about 51%, making it the largest basmati rice retailer in that country.
LT Overseas, whose shares are traded on BSE, will also get the entire trading business of Kusha Inc which was spread among several rice companies in India and elsewhere, LT Overseas’ chairman and managing director VK Arora told ET.
“We will tap the US market further where consumption of rice has gone up with the popularity of Indian dishes,” Mr Arora said of his plans. The acquisition is a milestone towards building up a global agro-product company, he added.
LT Overseas, which posted revenues of Rs 485 crore in 2006-07, is one of the top three volume players in the domestic basmati rice market engaged in the business of milling, processing and marketing branded and non-branded basmati rice.
The company also deals in research and development of rice and rice-food products. In the international market, its products are sold in more than 35 countries including the US, the UK, Canada and the European Union.
“With a growing demand for basmati rice in the US, this is the perfect time to tap the market,” said Mr Arora. With the acquisition of Kusha Inc, LT Overseas will get to leverage the distribution network of the company to expand its operation in the US and sell Daawat brands there.
Mr Arora said there will not be any change in the manpower of the company and Sam Nayyer, who is currently the president of Kusha Inc, will continue his association with Kusha.
The rice industry in the US is currently worth around $80 million and is growing 20% year-on-year. Kusha Inc, promoted by Sam Nayyer, is an established brand in Southern California with a revenue of around $40 million. It imports premium quality basmati rice from several countries in the Asian market including India.
Following the $20-million acquisition, the Daawat group’s share in the US retail market will increase from 7% to about 51%, making it the largest basmati rice retailer in that country.
LT Overseas, whose shares are traded on BSE, will also get the entire trading business of Kusha Inc which was spread among several rice companies in India and elsewhere, LT Overseas’ chairman and managing director VK Arora told ET.
“We will tap the US market further where consumption of rice has gone up with the popularity of Indian dishes,” Mr Arora said of his plans. The acquisition is a milestone towards building up a global agro-product company, he added.
LT Overseas, which posted revenues of Rs 485 crore in 2006-07, is one of the top three volume players in the domestic basmati rice market engaged in the business of milling, processing and marketing branded and non-branded basmati rice.
The company also deals in research and development of rice and rice-food products. In the international market, its products are sold in more than 35 countries including the US, the UK, Canada and the European Union.
“With a growing demand for basmati rice in the US, this is the perfect time to tap the market,” said Mr Arora. With the acquisition of Kusha Inc, LT Overseas will get to leverage the distribution network of the company to expand its operation in the US and sell Daawat brands there.
Mr Arora said there will not be any change in the manpower of the company and Sam Nayyer, who is currently the president of Kusha Inc, will continue his association with Kusha.
No comments:
Post a Comment