Agro-Tech board reconstituted, H1 profits down
ITC Agro-Tech, the ITC edible oils and agribusiness associate, will buy out ITCs 50 per cent stake in ITC Zeneca Ltd, the hybrid seeds joint venture.
ITC Agro-Tech, in a statement issued yesterday, said the board of the company had decided to initiate steps to buy ITCs stake in ITC Zeneca. The company is a 50-50 joint venture between ITC and Zeneca Plc of UK, a leading international seeds company and was set up in April 1994.
The joint venture recorded a 40 per cent increase in turnover during 1996-97.
ITC Agro-Tech board has been reconstituted with appointees from ConAgra of the US and Tiger Oats Ltd of South Africa. Utpal Sengupta is tipped to become the president of the company.
The ITC Agro-Tech board had allotted 51.3 per cent of the companys shares to CAG-Tech (Mauritius), a joint venture between ConAgra and Tiger Oats.
ITCs decision to reduce its stake in ITC Agro-Tech is in line with the tobacco majors overall objective of focusing on the core businesses of tobacco, hotels, printing and packaging and speciality paper.
With the allotment to CAG-Tech, ITC Ltds stake in ITC Agro-Tech dips to 16.9 per cent from the earlier 34.7 per cent, and the stake of Commonwealth Development Corporation of the UK would also dip to 7.8 per cent. CAG-Tech has pumped in Rs 93.75 crore in ITC Agro-Tech.
ITC Agro-Tech also announced its first half results with net profit dipping to a mere Rs 20 lakh from Rs 1.03 crore during the corresponding period of the previous year.
Gross profit at Rs 4.13 crore was marginally lower than the previous years Rs 4.42 crore.
The company recorded net sales of Rs 303.32 crore, up slightly from Rs 300.03 crore of the previous year.
The entry of foods major ConAgra marks a major change in the fortunes of the company. ConAgra is one of the leading foods and agribusiness companies in the world with net sales of about $24 billion.
It operates across the food chain in the agri-inputs, grain merchandising, commodity distribution services, speciality food ingredients and branded packaged foods. Tiger Oats Ltd has interests in food manufacturing, processing and distribution.
In 1996-97, ITC helped ITC Agro-Tech consolidate its edible oils interests and restructure itself.
As part of this, ITC purchased the Mantralayam Undertaking for Rs 115.80 crore and then licensed it back to ITC Agro-Tech under a five-year agreement.
ITC Zeneca is the market leader in sunflower hybrids with a market share of 20 per cent. It has also increased its market share in other crops like maize, forage and sorghum.
