Agro Tech plans contract farming

Agro Tech Foods Limited (ATFL), a subsidiary of global food major ConAgra, proposes to go in for contract farming to source corn locally for its ACT II brand popcorn. The company is currently importing corn and processing it at its unit in Uttaranchal.

On an experimental basis, the company is growing corn in about 100 acres of land in Rangareddy district of Andhra Pradesh.

"At the moment, we are conducting some trials in this regard," ATFL president Utpal Sen Gupta told Business Standard.

If the trials were successful, Gupta said, the company would undertake contract farming in Uttaranchal or in the neighbouring states of Haryana and Punjab.

ATFL had established its food processing unit in Uttaranchal in February 2006 for manufacturing instant popcorn in an excise-exempt location. The company needs cultivation of corn in about 2,000 acres to meet its requirement.

During 2005-06, ATFL's ACT II popcorn sales grew 45 per cent. Gupta attributed the growth to various factors including increased availability riding on the growth of modern trade and sales promotion activities.

Even in the current financial year, he said, the focus would be on strengthening and expanding the popcorn offerings. Expansion in the formats was also being evaluated to provide more choice to consumers. At present, the company was selling popcorn in three formats "� microwave, instant and vending popcorn.

Gupta said that the company had commenced project LINK ( Let's Integrate our Knowledge), a collaborative initiative between the supply chain function and sales and distribution, to provide improved service to customers and strengthen the presence of the company's products in a fast-changing retail environment.

This apart, ATFL has planned a bench-marking study to generate fresh ideas for initiatives that would further improve cost competitiveness of products and improving service level to customers.

Besides popcorn, the company's branded foods include Sundrop and Crystal edible oils, Rath vanaspati and Healthy World ready-to-eat snacks.