It seems like yesterday when we started our operations in 1993. Starting with a fewfarmers. Heritage Foods Limited (HFL) is now one of the leading dairy companies in India.We enjoy the respect of 3 lakhs strong farmer community engaging in milk procurement of10.6 lakhs litres on a daily basis. The journey has been a long and winding one - therehave been moments of glory as well as despair - but in the end we have managed to not justsurvive but thrive.
Since inception we have sincerely believed that our dairy farmers form the backbone ofour business. Our 25 year-long Journey is filled with instances where we have constantlyempowered our farmers and would continue to do so with a renewed focus. But. with growingbusiness comes increasing responsibilities - the responsibilities of taking care ofsteadily increasing dairy farming community and keeping ourselves acquainted withincipient market trends. As a means to this end. the Company has undertaken a number ofmeasures like providing free veterinary care supplying high-quality cattle feed atsubsidised rates mitigating risks through insurance policies [farmer and cattle] andfacilitating financial support for purchase of cattle.
We intend to undertake many such measures which I believe would address thechallenges faced by the dairy farmers and keep them secure in what's a highly cyclicalbusiness. Farmer's empowerment is our core value at this celebratory moment and wouldremain so forever at Heritage.
66 Our dairy revenues grew by 5.73% from Rs. 17688 million in 2015-16 to f18701 million in 2016-17 while the value-added segment reported a 14.77% y-o- y growthin revenues gg
At Heritage we recognise our responsibility towards protecting the environment withutmost importance.
As a forward-looking enterprise we are strongly committed for extending our greenfootprint. In line with this thinking we embarked on a clean energy initiative with an8.2 megawatt renewable energy facility (4 megawatts of solar power and 4.2 megawatts ofwind power] at multiple sites in Andhra Pradesh Telangana Maharashtra and Karnataka. Theresult is that 5596 of our processing facilities are powered by renewable energy. Theseeco-friendly initiatives of Heritage haven't gone unnoticed - a fact vindicated by thearray of energy conservation awards we have won recently.
Year in review
From a macro perspective we have seen massive transformations transpiring acrossIndia. With the advent of modernised cities and new avenues of trade there has been agrowing demand for quality packaged products everyday which earlier were largelyhomemade. The result: consistent growth for the industry in the last few years. A decadeback a similar trend was observed in demand for ghee in Southern India where householdsmoved from making ghee at home to buying it in the packaged format. Today we arewitnessing a similar trend with curd. We believe this will become the norm for other dairyproducts as well; for example flavoured milk.
This favourable industry scenario led to a satisfactory financial performance. Ourdairy revenues grew by 5.7396 from Rs. 17688 million in 2015-16 to Rs. 18701 million in2016-17 while the value-added segment reported a 14.7796 y-o- y growth in revenues.
In celebration of our 25 years of existence at Heritage Foods we took a bold decisionof rebranding ourselves. Here I would like to assure our customers that it's only thepacking that has changed but our promise of 'Health and Happiness' still remains the samein every product that we produce.
Over the last few years the industry has seen cattle yields rising with the adoptionof new diets and arrival of cutting-edge cattle maintenance systems. Furthermore withIndia being billed as one of the most attractive global opportunities from a consumptionperspective the country's dairy sector is expected to see a larger quantum of privateinvestment and a significant increase in entrepreneurial interest. With disposable incomesrising the industry is expected to see a renewed focus among Indian players to ventureinto thus far uncharted territories. Thus I believe the sector is perched atop the crestof a long U-curve and the years ahead would prove to be really fruitful for us in terms ofrevenues as well as profits.
Staying true to the Company's mission of reaching the Rs. 6000 crore - mark inrevenues by 2022 we aim to enhance the contribution of value-added products from thecurrent levels of 2496 to 4096 over the next five years. Heritage has already made inroadsinto Western parts of India like Pune and Mumbai and Northern Indian markets like DelhiNCR Punjab and Haryana. The management is confident of achieving these numbers viaorganic and inorganic means. Case in point: we recently acquired the dairy business ofReliance Retail Limited thereby cementing our status as a pan- India player.
Besides we are continuously adding high-end products to our portfolio. Similarly wealso aim to foray into the beverages segment. This will widen our current portfolio ofvalue-added products and brighten our growth prospects in the years that lie ahead.
Heritage at 25 is inundated with talented personnel who are eager to explore newopportunities and come up with new ideas. Thus at 25 we are no less excited than what wewere at the beginning. The only difference is that today we are much more confident andenjoy the support of a blossoming stakeholder community.
With best regards