Argonaut to invest Rs 30 cr in Kochi firm

The whiff of global private equity is percolating to each and every sector and corner in India.

Argonaut Partners, the Massachusetts-based private equity firm with $2 billion under management, is investing Rs 30 crore in Kochi-based Vallabhdas Kanji Ltd, one of the largest spices exporters in Asia. Both companies could not be reached for their comments.

VKL is the Rs 150-crore flagship company of the $100 million Kanji Moorarji Group, which includes Kancor Flavours and Extracts and Autohangar Indi. Kanji Moorarji is a well-established name known for its quality in the spice trade. This is the second round of investment the firm is securing after the $6 million it received from UTI Ventures during November 2006.

VKL has significant interests in flavours and extracts, and exports to over 40 countries. VKL is a key supply-chain and ingredient-solutions partner to fast food, snack-food, processed food, ready-to-eat meal and other food companies in India and abroad. Its clients include McDonald's, Pizza Hut, KFC and Domino's in India.

VKL also provides spices and seasonings for premier brands retailed in supermarkets and food-service chains in countries like the US, the UK and Australia.

At present, it has three manufacturing units in Kochi and subsidiaries in the US and Germany. As part of its long-term strategy, the company is planning to set up subsidiaries in the UK and Southeast Asia. Its Vietnam facility will have a capacity to process 20,000 tonnes per annum of both white and black pepper, which would be exported worldwide. VKL has capacities to process 22,000 tonnes per annum of various types of spices at its three manufacturing locations at Kochi.

The company, which may look at raising around Rs 100 crore through the public markets next year, recently acquired Mumbai-based Beeta Chemicals, which is into flavours and fragrances, for an undisclosed amount that will boost VKL's existing seasoning and private label business.

The acquisition will also bring to VKL's product portfolio a separately marketable range of products that will extend to segments as colas, bakery, chocolates and retail, and also fragrances. VKL is also expected to have a serious go at the domestic retail market with the IPO proceedings.

According to information available, VKL is expected to have a topline of Rs 300 crore by end of the present fiscal.