Leading basmati rice company LT Foods has set up a plant in the US for ready-to-heat organic rice with an investment of US $5 million as it seeks to tap the huge market for this product in America.
According to a PTI report: The company is aiming to generate revenue of over US $20 million in next five year from this product to be sold under organic food brand ‘EcoLife’, its CEO & MD Ashwani Arora said.
“We have set up a plant in the US to produce ready-to- heat organic rice. Trial run is happening and production will start from December. The total market size is US $265 million in the US and growing at 14 per cent,” Arora told PTI.
This plant, the company’s fourth facility outside India, will produce 20 million pouches of ready to heat organic rice initially and expand to 70 million pouches by 2018.
On investment, he said the initial capital investment on the plant is US $5 million and the company expects to generate revenue of US $21 million in next 5 years.
“We already have a strong presence in the US through our Basmati rice brand ‘Royal’ and we will be leveraging our strong presence and experience to grow our US market even further,” Arora was quoted by PTI as saying.
LT Foods basmati rice brand ‘Royal’ is largest brand in the US with a market share of more than 40 per cent, he added.
The company, which posted a turnover of about Rs 3,300 crore during last fiscal, is continuously diversifying its product portfolio.
Besides, selling basmati rice under many brands, including ‘Daawat’, LT Foods has been focusing on organic food and rice snacks.
“Keeping a pulse on changing consumer trend to innovate and bring out products that is relevant to the change is one of the core strengths of LT Foods,” Arora told PTI.
“Changing consumer lifestyles, including longer working hours and multi-schedule household, is leading to unstructured meal times. Convenient, ready to heat rice options appeal to millennials,” he was quoted by PTI as saying.
LT Foods’ US plant will import all required ingredient from India, including basmati rice.
“The US is a big market for the company as it contributes Rs 1,000 crore to overall turnover,” Arora told PTI.
Earlier this month, LT Foods announced foray into healthy snacks market and will invest US $5 million (about 32 crore) on launch of rice-based snack products.
The company has partnered Japans Kameda Seika to launch premium rice based snacks brand Kari Kari in India.