Flour mill to start packaging

With industrial units in Chandigarh not being able to expand much and heavy taxation posing extra problems, they are fast diversifying and moving to adjoining towns of Panchkula and Derabassi.

Chandigarh Flour Mills Private Ltd is planning to invest Rs 20 crore in diversifying into packaging. At present, the Chandigarh-based company is spread over an area of 25,000 square feet and has a wheat-grinding capacity of 150 tonnes a day.

"We are running at 60 per cent capacity and don't see growth in the domestic market. Hence it is necessary for us to diversify," said Vinod Mittal, managing director, Chandigarh Flour Mills Private Ltd.

The firm is a supplier of wheat flour to ITC, GlaxoSmithKline, and Nestle, which are among its major buyers. "We have brought 1.5 acres in Panchkula and are also looking for land in Derabassi," Mittal said.

With the project slated to begin by the end of this year, Mittal said their approach would be to get bulk orders from one company and slowly shift to catering for varied industries, from FMCG to medicine packaging.

The company is eyeing an annual turnover of Rs 16 crore in this financial year, and foresees a growth rate of 20 per cent next year. The company is addressing micronutrient deficiencies among the lower strata of society and wheat flour is being fortified with two nutrients, namely iron and folic acid.

"We have entered into a deal with Canada-based Micronutrient Initiative (MI) to provide 'strengthened' flour at virtually no extra cost to the consumer," Mittal said.

Commenting on the challenges faced by industry, Mittal said seven Chandigarh-based roller flour mills had to pay 4 per cent tax on wheat, unlike Delhi, where no tax was levied because it was a non-wheat-producing state. This government's policy is affecting regional industry.

"Only when there is uniformity in the tax structure in the country can we survive," Mittal said.