IFB Agro's fish feed plant in 2024, liquor biz face trouble on duty hike

IFB Agro Industries said its alcohol business is facing challenges due to a sharp hike in liquor prices due to a 30 per cent excise rise by the West Bengal government

IFB Agro Industries on Monday said its alcohol business is facing challenges due to a sharp hike in liquor prices due to a 30 per cent excise rise by the West Bengal government, while the company's new fish feed manufacturing facility in Odisha will be operational from March 2024.

IFB Agro management informed investors in a report that the company's board decided to set up the fish feed plant in Odisha despite neighbouring West Bengal being its major market, due to certain issues faced by it and for a better business environment.

The company did not divulge more details on the subject.

 

"The liquor business witnessed a sharp decline in volume in the industry during the year as there has been a sharp increase in prices by 30 per cent (MRP).

This abnormal increase in the prices of India Made Foreign Liquor was made effective from January 2023 by the West Bengal Excise Department, which led to a sharp decrease in demand, as the same has been made unaffordable for the people at the bottom of the pyramid," the company said.

IFB Agro Industries said it has made a representation to the state excise department and sought Chief Minister Mamata Banerjee's intervention to reconsider the decision.

Revenue from spirits, spirituous beverages and allied products in 2022-23 had slumped to Rs 932 crore, down from Rs 1,813 crore in the previous fiscal.

The company's efforts to expand distillery capacity were stymied by an oversupply of Extra Neutral Alcohol (ENA) in the state, leading to margin pressures and a decline in volumes, it said.

Informing about the new project, IFB said, "In order to strengthen its position in the fish feed segment, the company is setting up a fish feed manufacturing facility at Balasore, Odisha. Although West Bengal is the major feed market for the company, the board decided to set up the plant in Odisha due to issues faced and for a better business environment."

IFB Agro officials, when contacted, did not give make any comment on this issue.

In the past, however, the company has hinted at law and order issues.

The company stated that the current financial year will be a year of challenges for the alcohol business of the company.

The marine products division of the company did well with exports registering a revenue growth of 30 per cent due to better demand in the export market. The marine domestic food business grew by 87 per cent.

The consolidated net profit was down to Rs 49 crore in FY23 against Rs 58 crore in the year before, the company said.