Cremica Foods Ltd, known for its condiments such as mayonnaise and ketchup, is aiming to secure INR 500 crore, which would peg its valuation at INR 2,000 crore. According to Akshay Bector, chairman and managing director of Cremica Foods Ltd, the company plans to dilute 20-30 percent of its equity for this purpose.
The brand plans to use these funds to enhance operational efficiencies, support working capital needs, expand distribution channels, and venture into new product categories such as frozen items, specialty beverages, and pickles.
“We’re seeking funding to expedite the brand’s growth,” he stated.
Earlier, the brand had plans to raise funds during FY22-23, but the deal fell through due to regulatory issues.
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In addition to this, the brand plans to adopt a combined retail and HoReCa strategy for all its businesses in the future.
He affirmed, “We’ll begin with HoReCa for the new product launches, with plans to expand to retail for all products eventually.”
In Una’s Cremica Foodpark, the brand currently operates one manufacturing unit for sauces. Recently, it acquired an additional unit to further expand its sauce manufacturing capabilities.
The brand plans to expand the recently acquired unit by installing an additional production line.
Declining to disclose the acquisition cost, he mentioned, “It was a modest sum. The unit was distressed, and we acquired it. Now, we’re in the process of expanding it. However, the overall equipment cost for the project is estimated to be around INR 20 crore.”
The ongoing expansion is expected to boost capacity by approximately 25-30 percent. Additionally, the new unit within the food park will cater to the brand’s needs for the upcoming year.
“Given the current dynamics in the condiment industry, the situation is somewhat fluid. Hence, we’re gearing up to handle potential increases in volume should opportunities arise. Consequently, some of the capacities we’re constructing are progressing slightly ahead of schedule,” he elaborated.
Presently, the brand’s processing facilities cover an area of 20 acres, encompassing a building space of 300,000 square feet.
This financial year, the brand intends to broaden its distribution network, scaling up from 400 distributors and 20,000 retail touchpoints to 700 distributors and 40,000 retail touchpoints.
“Our goal is to expand our reach to 200,000 retail touchpoints within the next three years,” he stated.
Despite aiming for INR 450 crore in FY 23-24, the brand achieved a revenue of INR 340 crore.
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“Our margins have seen a 5-6 percent improvement. However, the revenue growth has been subdued due to a significant decline in HoReCa industry sales. We anticipate slight growth in business this fiscal year, but the substantial downturn in the food service industry has affected our sales. Nevertheless, with the sector showing rapid recovery, the future looks promising for both revenue and profits,” he elaborated.
This fiscal year, the brand expects to achieve an EBITDA of 15-20 percent, based on an expectation of reaching a turnover of INR 400 crore.
“Currently, our B2B operations constitute 15 to 20 percent of our total business, with the remainder being branded products. Meanwhile, HoReCa contributes to 70 percent of our total revenue,” he explained.
The brand remains optimistic about launching an IPO within the next two years.
“We’re steadfast in our IPO plans as margins have notably improved, and we’re committed to upholding our guidance on bottom lines for both this year and the next,” he concluded.
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