ANNUAL REPORT 2003-2004
The current fiscal has proved to be a watershed year for your company. The
year saw KRBL acquire the, world's largest, fully integrated rice milling
plant. Purchased for a sum of Rs. 16 crores in an open auction, KRBL is
investing around Rs. 100 crores in two phases to refurbish it. The plant is
expected to become fully operational by March, 2005.
Located at Dhuri, Punjab, this plant will significantly add size and muscle
to our operations; and immense value to our turn over and profitability
margins in the years to come.
With the Dhuri acquisition, our milling capacity will jump four fold to
167.5 MT/hour; our product basket will grow to include high margin and high
value products like rice bran oil, furfural and de-oiled cakes. Plus, we
will be in a position to generate 10.5 MW of power using husk at very low
For the year under review, turnover has dipped because of a sharp drop in
the availability of non-Basmati rice, which is controlled and regulated by
Food Corporation of India. But in the Basmati segment - our core strength -
we have notched an impressive 21 percent increase in basmati exports. Cash
profit before tax has improved by 3 percent. Despite a global squeeze on
prices, uncertainty of foreign exchange rates and vagaries of the
agricultural business cycle, the basic fiscal health of your company
continues to remain sound.
The recent move by reputed Saudi nationals to pick up a 16.70 percent
equity stake in KRBL (valued at US$ 5.90 million) is a strong vote of
confidence by international investors in your company and its brands.
Our marketing partnership with Omar Ali Balsharaf, Saudi Arabia's leading
super market chain has reinforced our position in the Middle East-the
largest Basmati market in the world In India, our brands continue to make
huge inroads into the highly competitive markets. Despite intense
competition and the prevalence of a large commodity market, India Gate and
Doon continue to achieve salience and build brand equity. In other quality
/ price segments too, Nur Jahan, Bemisal and Aarati are gaining ground.
KRBL continues to work closely with farmers in improving pre-harvest and
post-harvest practices. We are researching new seed variants; and are in
the process of extending the area under contract farming from the present
87,000 acres to 2,00,000 acres in the next three years.
Looking ahead, KRBL will consolidate its position as the world's largest
Basmati exporter; diversify into highly profitable, rice by-products;
create close partnerships with farmers, invest in contract farming, and
build enduring brands in India and abroad.
Central to our success will remain the commitment and expertise of our
people and business partners. I sincerely thank them and all other
stakeholders for their continued support.
Anil Kumar Mittal
Chairman & Managing Director