The Hindu : Business : U.S. private equity firm to invest in Eastern Group

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Thursday, Sep 28, 2006
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U.S. private equity firm to invest in Eastern Group

Special Correspondent

Factories to come up in Kothamangalam and Guntur

KOCHI: The U.S.-based private equity fund New Vernon Private Equity Ltd. has decided to invest $ 10 million in Eastern Condiments, the flagship company of Eastern Group.

Addressing a press conference here on Monday, Eastern Group managing director Navas Meeran said the company has gone for fresh investments to expand and consolidate its core activity of curry powder manufacturing.

Eastern Condiments, the largest exporter of packed curry powder to countries in West Asia from India, would use the new capital for expanding its footprint at all India level, Mr. Meeran said. "We are focusing the South-West corridor as the main area of expansion in the next three to five years.

We have already established a sizable presence in Mumbai (sixty stores and 33 vehicles in two months) with sale of twenty tonnes of curry powder in a month," he said.

The company plans to make a foray into North India after consolidating its operations in Maharashtra and other States, he said.

The group plans to emerge as a major player in curry powder market where it has about 65 per cent market share in the State.

The business plan incorporates the best practices of direct to retail marketing. The plan envisages transforming every vendor as a partner in a direct marketing network spread across the country.

The plan has been implemented in Mumbai with positive response, he claimed.

Answering a question, he said the group has already tied up with retail supermarket chains like Trinetra and also drawn up plans to tie up with Reliance retail chain.

Two factories are planned at Kothamangalam in Kerala and at Guntur in Andhra Pradesh to increase the daily production capacity to 200 tonnes in another couple of years.

At present the Adimali factory has a daily production capacity of seventy tonnes.

The group targets a turnover of Rs.163 crore with profit to the tune of Rs.21 crore for 2006-07 from the present turnover of Rs.122 crore and Rs.18 crore profit.

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