VKL plans local spice brand acquisition

Vallabhdas Kanji (VKL), an exporter of value-added spices is eyeing an acquisition in the domestic market.

"We will be acquiring some domestic brands in the domestic spices segment and will also increase our food ingredients capacity," said Ajay Mariwala, managing director.

He did not divulge further details of the brands being targeted but hinted that apart from exports, it will also consolidate in the domestic market.

To fund the buyout, the company is expected to come up with an IPO of between Rs 70-110 crore this year. Sources in the company said discussions were on and the issue would hit the market after a couple of months.

The spices exporter may also enter the dehydrated vegetable business and venture into the retail segment.

Mariwala said for now the company has no plans to go beyond spices. "At present, being in the spices business is enough for us," he added.

VKL, a part of Kanji Morarji Group, exports around 80 per cent of the total spices exports. And in the domestic market it has a presence over 20 per cent of the spices market.

In the processed pepper export, the company has around 65-70 per cent share and in the processed chilli segment, it accounts for 18-20 per cent.

VKL has set up its fourth manufacturing location in Vietnam in December. The company expects that with its Vietnam arm, its global presence will strengthen. It also acquired the business of Beeta Chemical in Mumbai.

Apart from this, the company had concluded a $ 6 million private placement with UTI Venture Funds in October.

VKL also packs spices and seasonings in the brands of some premier companies, which are retailed in supermarkets and food-service chains in countries, including the US, UK, Australia.

The company has its subsidiaries in Germany and the US. In India it has its units in Kochi.