The Hindu Business Line : Heritage Foods to set up 4 more processing units

HERITAGE Foods (India) Ltd (HFIL), engaged in the business of milk and milk products, is setting up four more milk procurement and processing centres during the current fiscal at a cost of Rs 8 crore.

"With the commissioning of the four new projects, HFIL products will be available in all major towns and cities in South India," the company's Whole-Time Director, Dr. V. Nagaraja Naidu, told Business Line.

The new 50,000 litres per day capacity units are being established at Battiprolu in Andhra Pradesh, and Vadamadurai and Tirunelveli in Tamil Nadu. The location of another unit is yet to be identified. The Vadamadurai plant, expandable to 1 lakh litres per day, is meant for marketing liquid milk in Coimbatore, Madurai, Dindigal, Tiruchurapalli, Erode, Karur and Palani.

The company is also creating facilities for manufacturing of table butter apart from exploring the possibility of entering the business of branded food products. It has launched flavoured milk and is planning to market plain and fruit yoghurts shortly.

HFIL is expected to start the sale of table butter from October and come out with branded food products in a span of six months.

Dr. Naidu said the company had drawn up plans for expansion to achieve the desired growth of business and improve profitability for the present as well as in future. With so many newcomers entering the industry, competition was increasing. The company's existing operations were also exposed to volatility of prices of products and raw materials.

He was hopeful that the company would post a turnover of Rs 200 crore during the current fiscal as against Rs 165.07 crore last year. In the first quarter of 2002-03, the company had posted a turnover of Rs 46.17 crore and a net profit Rs 3.95 crore. Its basic and diluted earnings per share stood at Rs 3.96.

Last year, the company had bought back 8.1 lakh equity shares of Rs 10 each at an average price of Rs 27.62 per share. It had extinguished 16,149 shares before March 31, 2002 and the balance 7.93 shares by May 31, this year.

Consequently the number of equity shares of the company reduced from 1.08 crore to 99.9 lakhs. Accordingly, the paid-up equity capital had declined from Rs 10.8 crores to Rs 9.99 crores.

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