 "IG International to set up first greenhouse plant for residue free fruits")
Fresh fruits importer Navi Mumbai-based IG International plans to set up India's first greenhouse plant for production of pesticides residue-free fruits conforming to global quality norms.
Proposed to set up in Bangaluru, the plant will have hydro phoning technology for fruits production in India. This will help India enter into Japan, Korea and Dubai markets for fruits exports. These markets remained un-accessible for Indian exporters due to pesticides residues in fresh fruits.
To sail smoothly, however, IG International is all set to buy a majority stake in Canada's greenhouse technology supplier Sandhu Green House at an enterprise value of Rs 75 crore (Can $15 million).
"Talks are in advanced stage to acquire a majority stake in this company to strengthen our backward integration and bring first of its kind hydro phoning technology for pesticides - free production of fruits in India. We have appointed two Canadian consultants to finalise negotiations for 100 per cent equity stake in this company," said Tarun Arora, Director, IG International.
The rationale behind this acquisition is to produce pesticides-free (but with fertilizer) fresh fruits conforming to Japanese, Korean and Dubai standards of quality fruits. Currently, these markets remained out of reach because of high quantity of pesticides residues in Indian fruits.
"We assume this deal would be finalized in two-three months and the first greenhouse plan with hydro phoning technology would be set up by the current year end. Once our fruits exports start to these highly quality sensitive markets, our sales would multiply," said Arora.
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IG International plans to raise 80 per cent of the deal value from banks while the remaining 20 per cent would be funded through internal accruals. The company has a total debt on its book of around Rs 35 crore against its annual sales of Rs 300 crore. Imported fruits contribute around 95 per cent of sales currently which the plans to change to 80 per cent in two years through increased focus on domestic operations.
IG International currently imports apples, kiwis, oranges, cherries and exports grapes among other fruits. Also, the company sells in domestic markets through its 27 owned retail outlets across the country in addition to fruits supply to organized retailers and e-commerce platforms. With its 75 refrigerated trucks and 25,000 pallets facilities across the country, the company provides end-to-end solution in fruits.