Rice exporter Kohinoor Foods today said it had completed the Rs 520-crore deal with US-based spice maker McCormick to set up a joint venture for marketing basmati rice and other food products in India.
In the joint venture Kohinoor Speciality India, McCormick has 85% stake and rest is with Kohinoor Foods.
"McCormick today completed the formation of joint venture with Kohinoor Foods to market and sell basmati rice and food product in India. The venture was announced in June 2011 and will now be named as Kohinoor Specialty Foods India," McCormick said in a statement.
"McCormick had invested a total of Rs 520 crore ($113 million) in the deal and thus commands an 85% interest in Kohinoor Specialty Foods India," it added.
McCormick expects the joint venture sales to be about $85 million in the first year. Satish Rao, who has been associated with McCormick for the past 16 years, will act as the Managing Director of the JV.
The joint venture will have about 275 employees and a modern production facility at Bahalgarh in Haryana, which has been transferred from Kohinoor Foods into the JV.
With more than $3 billion in annual sales, McCormick manufactures, market and distributes spices, seasoning mixes, condiments and other flavorful products to the entire food industry.
Through this JV, McCormick plans to develop and launch new products, penetrate potential and under-served markets and thereby expand in the food service channel in India.
"The joint venture is a part of McCormick's strategic business plan to expand sales in emerging markets. Including India, McCormick expects emerging markets to contribute about 12% of total sales by 2015," the statement said.
This is the McCormick's third investment in India. It first joined with AV Thomas Group in 1994. In 2010, McCormick acquired a 26% stake in Eastern Condiments Ltd, which has become a leading brand of spices, seasonings and other related food products in India and the Middle East.
