Agro Tech plans to expand operations

Agro Tech Foods Limited (ATFL), an affiliate of global food major ConAgra, is planning to expand its operations significantly in the current financial year following the settlement of all pending issues pertaining to the Mantralayam processing plant in Andhra Pradesh.

Recently, the Income Tax Appellate Tribunal, Hyderabad, had allowed the company's appeal against the demand for payment of Rs 12.87 crore raised by the I-T authorities with regard to the sale of the Mantralayam undertaking in 1997-98.

ATFL also paid the last instalment due to ITC Limited in June, this year, under the settlement agreement it had reached with the tobacco major in respect of the Mantralayam unit.

The edible oils processing plant, established by ITC, had been leased out to ATFL when the latter was sold to ConAgra.

"The refund of this amount by the I-T department along with interest will lead to significant cash infusion into the company. We will become virtually debt-free," ATFL president Utpal Sen Gupta said adding the money would be utilised for expansion as well as strengthening the existing operations of the company.

"This is a very interesting phase in the development of the company. All the problems we have inherited and which have been taking a lot of our attention and cash have been resolved," he told Business Standard.

ATFL registered a 59 per cent growth in net profit at Rs 16.1 crore in 2006-07, compared with Rs 10.1 crore in the previous year. Its turnover last year increased by 11 per cent to Rs 1,038 crore from Rs 938 crore in 2005-06.

Gupta said ATFL would be expanding its presence in food service by offering value-added food ingredients to institutional customers.

In this regard, the company would be introducing some more brands from the ConAgra Foods portfolio in a couple of months.

This apart, ATFL will be investing in introducing other value-added variants of its flagship Sundrop brand of sunflower oil. A new variant, Sundrop Olivea, which is a blend of olive and sunflower oils, is already being test marketed in Bangalore.

Stating that the sales of the company's Act-II brand of popcorn registered a 65 per cent growth last year, Gupta said the growth seen in the instant and microwave popcorn would be strengthened by introduction of ready-to-eat popcorn, which is being currently test marketed in Delhi.