The venture will also invest in R&D operations in Punjab.
The Mittal-promoted Bharti group — with interests in telecom, insurance, realty and retail — has ventured into the food and beverage (F&B) segment in partnership with Singapore-based Del Monte Pacific.
The joint venture, called Field Fresh Foods Pvt Ltd, plans to invest Rs 100 crore to set up a greenfield manufacturing facility in India for processed food products at Hosur in Tamil Nadu, which will be operational by 2010.
“We will start (manufacturing) two products — juice drinks and culinary products like ketchup and mayonnaise — in the first phase,” said Rakesh Bharti Mittal, vice-chairman and managing director, Bharti Enterprises.
He added the company will launch Del Monte’s products in 15 Indian cities, including Delhi, Mumbai, Pune, Jammu, Amritsar and Ludhiana, by the year-end.
Bharti Enterprises, the parent company of telecommunications services provider Bharti Airtel Ltd, and Singapore-listed fruit-and vegetable-based products maker Del Monte Pacific had set up the joint venture in 2004 to supply fresh fruit and vegetables. It has invested Rs 150 crore in India over two years.
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The F&B market holds great potential. The Ministry of Food Processing Industries has come out with a vision document that lists out a plan to double the market size of the food processing industry to Rs 8,20,000 crore by 2009-10 and trebling it to Rs 13,50,000 crore by 2014-15.
AT Kearney estimates the market sales of food and beverage retailing in India at $135 billion and growing at 10-15 per cent annually. The country produces 41 per cent of the world’s mangoes, 28 per cent of tea, 23 per cent of bananas, 24 per cent cashew nuts, 36 per cent of green peas and 10 per cent of onions.
But very little is being processed and exported. The company launched a range of food and beverage products, including fruit drinks, packaged fruits, ketchup and sauces, apart from several Italian products for the Indian market under the Del Monte brand.
“These products are, as of now, being imported at a duty of 37 per cent. Yet, they would be competitively-priced. We want to be one of the top 10 food and beverage companies in India in the next five years,” Mittal said.
The venture will also invest in research and development (R&D) in a 300-acre company-owned land in Punjab.
It expects processed foods to contribute two-thirds of its total revenue, with the remaining coming from selling fresh fruits.
“The food and beverage foray into India is a long-term commitment,” Joselito D Campos Jr, MD & CEO, Del Monte Pacific Ltd, said.