Annapurna Group aims to be a Rs 1,000-cr company in next 5 yrs

An alumnus of Assam's Gauhati University, Subir Ghosh has successfully transformed the company that he inherited from his father, from a small family-owned business to a strong corporate entity. Annapurna Group is now the largest dairy and food company in the Eastern India with a robust 25-30 per cent growth annually. The next phase of the growth for the company will come by way of turning it into a strong national player and subsequently an international player.

Speaking to Bizz Buzz exclusively, Subir Ghosh, Managing Director, The Annapurna Group, shares the journey of the brand and the company and also charts out the future growth plans.

Annapurna Group a 70 years of legacy. How has been the journey so far?

I would say the most important part of this long journey has been that we have managed to remain relevant and a popular brand even today. We could do that by way of delivering the purest food products to our consumers, being loyal to its founder- late Gouranga Chandra Ghosh and steadfast to his guiding principle and commitment that 'purity is a right'. Over the years we have built three companies under its fold- Sundarbans Foods Products Pvt Ltd, Annapurna Food & Beverages and Satez Agro Products, rolling out more than 30 well-defined and popular products in different categories like dairy, fruit preserve, condiments, pickles, ready-to-cook packs, ORSs Soft drinks, honey and so on. We have more than 900 employees now. We have so far concentrated heavily on eastern and north-eastern markets and managed to capture a sizeable market share in these areas. Now that we have consolidated our position in the East and the North East, we are looking at tapping the pan India market.

So by when you want to be a pan India player?

We have lined up plans to be a pan India player by 2025. And we are confident that we will be able to do that. All we will have to do is to replicate our model in our existing markets that is East and North East. While doing that and marking our presence across the country, we will rely on significant growth and expansion in General Trade (GT), Modern Trade (MT) and e-commerce. At present, our e-commerce business is growing at 12 per cent- 15 per cent. But going forward, we expect this to grow at 60-70 per cent.

Currently, our products are available across 12 States in the eastern region. We are now planning to tap NCR, Madhya Pradesh, Chhattishgarh, Karnataka and Hyderabad within next 12-18 months. By 2025, we plan to ensure presence in all geographical locations of India.

How big or large would be the overall market in the segments you operate in? And at what rate these are growing?

The overall dairy market is estimated to be over Rs 70,000 crore, the sauces and condiments market is estimated to be Rs 2,80,00-Rs 30,000 crore. Ghee is our flagship products. We are equally strong in beverages segment. The dairy segment is growing at close to 30 per cent CAGR, while the beverages segment is growing anywhere between 30 per cent-40 per cent annually. Overall, we have been achieving 20 per cent-30 per cent YoY growth over the last 10 years.

What are the popular brands or sub-brands that you have currently?

We have popular brands like Annapurna, Fundaaz, Sprint, diptips, Wondr, Gravi, RS, uRBan, Orng, Cafe Dairy, to name a few. As we foray into the national market, we will continue to roll out many more brands in different food and beverages categories.

Would you be looking at export markets, beyond borders as well?

Certainly yes! We have started exploring some of the neighbouring markets. At present, we are in the process of obtaining various certifications (we have got most of them). As starter, we would be exploring Bangladesh and Bhutan markets. And very soon we would be tapping the US, European and the Middle East markets, especially with our ready-to-cook packs, which have huge opportunities in these markets.

At present, how many manufacturing facilities do you have? And once all your ambitious growth plans are in place, would these existing units suffice or would you require to ramp up capacities or put up new plants?

At present, we have four manufacturing facilities of our own (three in Guwahati and one in UP) and a number of contract manufacturing facilities in different parts of the country. By 2025 we will be coughing up another Rs 300 crore for different purposes, of which a significant part will go in putting up 3-4 new plants, besides ramping up capacities at existing units. We are in the process of acquiring suitable lands in West Bengal for setting up dairy unit and beverages plant. We will also get into modern vegetable farming in West Bengal soon. Our immediate investment in West Bengal will be to the tune of Rs 70 crore.

How do you plan to mobilise funds to back up your future expansion plans?

See, we are a debt-free company now. Our current turnover would be in the order of Rs 300 crore and we hope to be a Rs 1,000 crore company within next four-five years or so. Our valuation is already Rs 1,000 crore. Our EBIDTA is high. We need funds now. We are planning to take the PE funding route and in talks with a number of PE funds. We are ready to dilute 20-25 per cent and will raise funds accordingly. After the PE funding and after 2025, we plan to raise funds through the IPO route.

What would you focus on in terms of product portfolio, in the years to come?

We will increasingly look at value added dairy products, country drinks in beverages segment and ready-to-cook or ready-to-eat packs, going forward. Besides, we also plan to introduce a new line of Ayurveda-based products and commission a new plant for that purpose soon - all with the vision of providing the purest forms of food products to its customers.