US based McCormick Inc, valued at 3.3 billion dollar company has signed a 85:15 joint venture (JV) with Kohinoor Foods ltd which is India's leading basmati rice producing company. With this, McCormick is investing over Rs 500 crore for the plant, marketing, sourcing and distribution in India.
Along with this, McCormick will introduce a series of products in India by June 2012. It has over 700 products in the 100 countries. It will secure Kohinoor's manufacturing units in India and it will own sales, marketing and distribution rights of Kohinoor for India.
Commenting on this development, Satish Rao, the new managing director, Kohinoor Speciality Foods said, "This JV is a supply agreement between McCormick and Kohinoor Foods. Kohinoor will produce rice for McCormick, both the companies will leverage each other's capabilities and McCormick will develop infrastructure for Kohinoor. We will introduce food products especially for India by the end of June 2012."
Including India, McCormick expects emerging markets to contribute approximately 12 per cent of total sales by 2015, from 9 per cent.
McCormick has already formed two JVs with Kerala based AV Thomas and Eastern Spices for exports.
Rao added, "McCormick believes that Kohinoor has developed a fast-growing, profitable business, with an excellent pan India brand equity in brand 'Kohinoor' and an extensive national distribution network enabling a product reach of 3,50,000 retail outlets. This will help McCormick strengthen their footprint in India. McCormick commands an 85 per cent interest in Kohinoor Specialty Foods India Private Ltd. McCormick expects the joint venture sales to be approximately Rs 400 crore in the first year, and will be accretive to McCormick's earnings per share in 2012."
For Kohinoor, Pune is the largest selling market with the total sales of Rs 35 crore in the last financial year.
