Himalaya Food International, a company in the frozen and canned food processing industry, is in the process of revitalizing its french fries business, as per the announcement made by its chairman on Monday.
To align with the potato season commencing in March 2024, the company aims to finalize the setup of a 50,000-tonnes-per-annum french fries line and a 12,000-tonnes potato speciality line by December 2023.
“These lines have the potential to add INR 700 crore to the top-line at full capacity,” said Himalaya Foods International Ltd (HFIL) Chairman Man Mohan Malik in a letter addressing shareholders.
Previously, HFIL had entered into a joint venture (JV) with Simplot USA. However, a disagreement arose between the two JV partners, and the matter was taken to arbitration in Singapore.
According to reports, the American JV partner has claimed a refund of USD 14 million in relation to the sale of the french fries line and potato specialty lines.
A ruling from the tribunal has mandated Simplot to return the equipment for both the french fries and potato specialty lines, while HFIL has been instructed to pay a sum of USD 3.96 million.
“Though we are confident to neutralise 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.
In a one-time settlement (OTS) agreement, the company has resolved outstanding debts with a consortium of banks by paying a total of INR 82.80 crore.
“We have already paid INR 46.75 crore, including Rs 10 crore 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 debt-free company by October 2023,” he said.
At present, Himalaya Food International’s primary focus is to reinforce working capital, generate funds from non-core assets, and fulfill 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.
Instead of relying on traditional sources in Europe and North America, the entire South-East Asia region, along with Japan and the Middle East, is now procuring their french fries from Gujarat.
