Himalaya Food International is among the top-notch players in the frozen and canned food processing segment, and now it is planning to revive and rebuild its French fries business. The company is in the process of installing the 50,000 tonnes per year French fries line and the 12,000-tonne potato specialty line, which it targets to complete by December 2023 to catch up with the potato season starting in March 2024.
According to Himalaya Foods International Ltd. (HFIL) chairman Man Mohan Malik, these lines have the potential to add Rs. 700 crores to the top line at full capacity. Earlier, HFIL had a joint venture (JV) with Simplot USA, but there was a dispute with the JV partner, and the matter went to Singapore for arbitration.
Actually, the American JV partner had claimed USD 14 million in refunds against the sale of the French fries line and specialty potato lines. The tribunal has directed Simplot to return the equipment for French fries and potato specialty lines and HFIL to pay a total of USD 3.96 million.
“Though we are confident we can neutralize any claims raised by the failed JV partners due to their own repudiation of the Singapore award by defying the ‘time-bound’ return of the machinery, we are geared up to generate and save funds for any adverse judgments,” he said.
The company has settled debts with a consortium of banks by OTS (one-time settlement) to pay Rs 82.80 crore. “We have already paid Rs. 46.75 crore, including Rs. 10 crore in interim relief from the insurance company. We plan to pay the balance amount in the next four months and have aligned the balance claim amount from insurance and the proceeds from the sale of Rajasthan land to become a debt-free company by October 2023,” he said.
Now the immediate priority of Himalaya Food International is to strengthen working capital, generate resources from non-core assets, and execute a backlog of export orders.”French fries and other fried and frozen potato products have a great demand in India and worldwide. Gujarat has become the hub for the exports of potato-based products due to massive contract farming and suitable climatic conditions,” he said. The whole of Southeast Asia, Japan, and the Middle East are sourcing French fries from Gujarat instead of traditional sources in Europe and North America.