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Godrej Agrovet looks to expand feed business after strong growth

Published on 23 September, 2013, Last updated at 11:10 GMT
 
Godrej Agrovet looks to expand feed business after strong growth

Godrej Agrovet Ltd, the farm business unit of Godrej Industries Ltd, are looking to further increase investments in its animal feed business after seeing good strong growth in business and forecasting more of the same for the future.

The company is currently active in looking for either a partnership with foreign companies, or purchasing a company, to help the company expand its business and aid it in research, development and production.

In an interview last week, managing director Balram Yadav, said "We will not hesitate to borrow or to raise capital in case there is an exciting M&A (merger and acquisition) opportunity."

Godrej Agrovet has managed to achieve a compound annual growth rate of 25% for the last three years, and “maintaining this growth rate is challenging with no M&A”, Yadav said.

Godrej Agrovet operates in four business segments—animal feed, oil palm plantations, agri-inputs and poultry.

In the past three years, it has invested in capital expenditure to the amount of approximately Rs.300 crore, of that approximately two thirds was for capital investments specifically for its animal feed business.

June quarter sales for Agrovet grew 27% year on year, mainly driven by good performance from its animal feed and other agrobusiness. Its animal feed business accounted for 33% of Godrej Industries’ revenues as on 30 June.

Godrej Agrovet currently compete in the feed market with other companies such as Cargill India Pvt. Ltd, SKM Animal Feeds and Foods (India) Ltd and Gujarat Ambuja Exports Ltd, among others..

Talking about future investments, Yadav said "In the next three years, we will invest about Rs.250 crore to expand animal feed, oil palm plantation and agri-input business."

 

 
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