Maharashtra invites fresh bids for Mafco

The Maharashtra government has invited fresh bids for offloading its controlling equity stake in Maharashtra Agricultrual and Food Processing Corporation (Mafco) that has 4,000 dealers (read retailer) and 18 distributors in the state for marketing processed fruits, vegetables, dairy products and poultry and meat products.

The company, as on December 31, 2004, had a workforce of 268 after 225 employees were retrenched through a voluntary retirement scheme.

Mafco, which has a negative balance sheet for the last five years, saw its profit after taxes pegged at Rs 116.74 lakh in 1999-2000, -Rs 80.63 lakh in 2000-2001, -Rs 261.13 lakh in 2001-2002, -Rs 118.38 lakh in 2002-2003 and -Rs 192.04 lakh in 2003-2004.

The company's borrowings stood at Rs 447.02 lakh up to March 31, 2004 and was estimated to have declined to Rs 363.15 lakh by December 31, 2004 (as per provisional and unaudited figures).

According to a senior secretariat official: "The company suffered owing to a bad business cycle witnessed by the farm produce sector and also as on account of bad management practices. The landed assets and strong retailing networking at the company's command is expected to net the state a substantial sum through the disinvestment that has been set in motion for the second time."

Couple of years back, following directions from the Maharashtra Board for Restructuring State Enterprises (MBRSE), bids were invited for Mafco.

However, even though five of the bidders were shortlisted, including ITC and Al-Kabeer, the process had to be closed. According to the official, already a steady stream of enquiries, which would translate into expressions of interest, have been received by ICRA Management Consulting Services, which has been retained for facilitating the bidding rocess.

Mafco has consumers comprising hotels, schools, flight kitchens, hospitals, corporates, super bazaars in Mumbai, Pune and Nagpur. Institutional sales account for around 10 per cent of the company's turnover.

Similarly, around 90 per cent of the mango pulp sales by Mafco are through exports to Kuwait and Saudi Arabia.