India, April 18 -- ITC has signed a Share Purchase Agreement to acquire 100% of the share capital of Sresta Natural Bioproducts ('SNBPL'), an Indian company primarily engaged in the business of manufacture and sale of organic packaged food products under the '24 Mantra Organic' brand in the domestic as well as in international markets. SNBPL is a pioneer in the domestic organic foods space providing fully integrated 'Farm to Fork' traceability and is a leading player in the organic packaged staples category in India.
SNBPL's portfolio comprises a wide range of 100+ organic products spanning branded grocery staples, spices and condiments, edible oils, beverages, etc. SNBPL has a strong international presence with a deep connect with the Indian diaspora. SNBPL's vertically integrated supply chain promotes sustainable livelihoods for its network of approx. 27,500 farmers spread across approx. 1.4 lakh acres of certified organic land in 10 states. The strong network of farmers and certified organic sourcing capability are key sources of competitive advantage for the company.
The Indian government has been actively promoting the organic foods industry through various schemes and initiatives, aiming to improve the livelihoods of farmers, boost exports, enhance packaging/ marketing of products and ensure food security, while promoting sustainable agriculture. India is also well-positioned to become a global hub for organic sourcing with existing strengths in areas like rice and organic tea.
The Indian organic market (domestic and exports) is currently estimated to be Rs. 10,000 cr. in size. The category has high growth potential given the low penetration levels domestically as well as globally and the growing consumer preference towards natural and organic food products. The organic foods space is an area of interest for ITC given the strong synergistic linkages to the Company's branded packaged foods portfolio and the immense growth potential of the category. The acquisition reinforces ITC's commitment to build a portfolio of future-facing winning brands that addresses the evolving needs of Indian consumers, and will unlock value creation opportunities by leveraging ITC's institutional strengths to drive synergies in areas such as product development & innovations, sourcing, manufacturing, supply chain and distribution.
This investment is in line with the 'ITC Next' strategy articulated by Chairman, Sanjiv Puri, that focusses also on building a future ready portfolio of products that serves evolving consumer needs.
Commenting on this acquisition, Hemant Malik, wholetime director, ITC stated, "We are excited to have 24 Mantra Organic as part of ITC's Foods Business's portfolio of nutrition-led healthy foods products. 24 Mantra Organic has built a robust backend and sourcing network which is core to its trusted organic products portfolio. Aligning with national priorities, we are confident that 24 Mantra Organic will fortify ITC's presence and market standing in the high growth organic products space, in both Indian and overseas markets".
Rajashekar Reddy Seelam, founder & managing director, SNBPL, stated, "After 21 years of partnering with Indian farmers to create trusted organic products, we are excited that ITC will be driving the next phase of growth for 24 Mantra Organic. ITC shares a common vision to promote sustainable livelihoods for farmers and ensure healthy lifestyle for consumers. We are confident that ITC's strengths in product development expertise and distribution strength across channels will help in taking 24 Mantra Organic to millions of homes for many generations to come, improve livelihoods of large number of farmers across the country and carry forward our legacy of ecological stewardship".
A presentation on the acquisition is enclosed.
Published by HT Digital Content Services with permission from FoodTechBiz.