Karuturi Global Ltd
Karuturi Global - A floriculture, horticulture, Food-processing - emerging global player
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10 comments:
From Rose, to flower retail to agri commodity to processed food - an emerging global agri player.
Updates
=======
1. Acquired 1 lakh acre in Ethiopia. Plan to acquire remaining 6.5 lakh acres by fy08 end.
2. 50% of the land would be used for rice cultivation. Remaining land for long term crops like palm oil and sugarcane. 10000 acres for vegetables.
3. Revenue to start accruing from 3rd quarter and for long term crops it would be from 2010 & 2011.
4. Would export the produce to neighbouring countries, europe and west asia.
5. 250 million dollar financing with 100 millions from PE and 150 million from debt.
6. More investments planned for kenya, ethiopia, europe and dubai.
FY09 Q1 topline at 107.8 crore, bottomline at 31.69 crore.
EPS at 0.79/-.
Highlights below:
- Of the total 750,000 acres offered by the Govt of Ethiopia, balance 650,000 acres of land will be acquired over a period of next 3 months.
- The Company´s overseas subsidiary Karutari Overseas Ltd., Dubai is in the process of raising USD 100 Millions. The proceeds of this will be deployed in its new agri initiative overseas.
- The state of the art food processing plant at Taumkur has commenced commercial operations during the current quarter.
-manish
Oil price forces change to flower flow
Geoff Hiscock | August 11, 2008
SOARING air freight prices this year are hastening a switch to sea transport in what will mark a tipping point for the global cut flower industry, according to the world's biggest rose supplier, Ramakrishna Karuturi.
Bangalore-based Karuturi, who aims to produce 1 billion stems a year by 2010 from his flower growing bases in India, Kenya and Ethiopia, says seaborne exports represent the new reality in the $US30 billion a year global flower trade.
"This is a disruptive element, with the potential to bring cargo costs down by at least 60 percent -- and 40 percent of a rose’s cost is freight," he told The Australian.
The value of a flower begins to wilt as soon as it is cut. Hence, high-value flower exports to key markets in Europe, Japan and the U.S. usually are air freighted to get them into customers’ hands as quickly as possible.
But the spike in oil prices - including aviation fuel - in recent years has accelerated work by flower growers and shipping companies on the seaborne alternative and its associated storage technology.
Karuturi believes the trend to sea freight, using special refrigerated containers where temperature, humidity, and other factors can be remotely monitored, will have a far bigger impact than just a cost saving for shippers.
"It is far more disruptive than just cost. It will lead to a big increase in consumer demand, and it means growers will have to extend the product life by four weeks," he said.
For example, it would mean growers in Africa or Latin America could begin shipping roses to say, Europe and the United States in January, well in advance of the peak sales date of Valentine’s Day on February 14, rather than the air freight rush that now takes place in early February.
"The cost/supply spikes associated with Christmas, Valentine’s Day, Mothers Day, Chinese New Year and Russian Mother’s Day could be a thing of the past," Karuturi said.
According to Karuturi, sea freight for flowers was initiated about eight years ago by a grower in Ecuador, for the U.S. market. Karuturi will ship his own first containers of flowers next month, from India to Singapore, and from his major production bases in Africa to Europe. Shipping roses to Australia is also on his horizon.
"It (sea freight) has been baby steps so far, but now it’s reaching traction." In Karuturi’s view, the trend to sea freight will "decimate" the European business. "Flowers will no longer be expensive," he declares.
The Netherlands has been at the centre of the world’s flower trade for decades, handling imports from growers in Africa and elsewhere, and supplying wholesalers and retailers throughout Europe. Colombia and Ecuador are the big suppliers to the U.S., while China has the largest area under cultivation for floriculture.
But since 2007, when Karuturi bought the Kenya-based Sher Agencies from its Dutch parent for about US$70 million, Karuturi has been the world’s rose king. At the same time he has added a flower business in Ethiopia, built from scratch.
"In terms of size, Kenya is bigger now (about 150 hectares under greenhouse), but Ethiopia is being ramped up and by December this year will be bigger than Kenya," he said.
For Karuturi, Ethiopia offers a better growth outlook than Kenya, where contiguous land is not available. Equally promising because of its proximity to the U.S. market is Latin America, where Ecuador, Colombia or even a greenfield site in Brazil are possibilities for Karuturi.
"We have been seriously looking at Ecuador. We want to offer a better product portfolio and de-risk our business model. Essentially it is a northern hemisphere-southern hemisphere arbitrage play. It is good to broaden the base of our production."
Karuturi, who trained as a mechanical engineer and whose family still has business interests in cables, transmission towers and processed food, insists he is "just a farmer" with a passion for agriculture.
"Five years from now, I hope that roses will only be 25 to 30 percent of our company (Karuturi Global Ltd) revenue."
While roses are ringing up the company’s cash registers – particularly in the fast-growing Indian market – what really excites Karuturi is a US$1 billion agricultural project in Ethiopia, covering a massive 340,000 hectares, where he plans to grow rice, sugar cane, palm oil and vegetables.
"That is the sort of scale you could once only think of getting in Argentina, Brazil or Australia. I couldn’t get that much land in India. But we have obtained the land in Ethiopia on long-term 50-year lease."
Karuturi aims to break ground on October 8 this year. The location is Gambella in the west of Ethiopia close to the south Sudan border, where a tributary of the Blue Nile runs through the land.
"We’ve bought the farm equipment, and lined up agricultural experts from the U.S. and Latin America to guide us in large-scale farming. We will be in production by February 2009, opening 10,000 hectares in the first quarter, and then adding 10,000 hectares a month after that," he said.
Within 14 months Karuturi hopes to have built a sugar mill, rice mill, ethanol processing plant and a palm oil refinery. Initial funding for the project is $US100 million in private equity, $US100 million from Karuturi and US$200 million of debt. In a year’s time, Karuturi plans a second round of funding.
Karuturi says his eventual goal is to create an Asian food multinational along the lines of Cargill, ConAgra and Del Monte. "These are my benchmarks."
But in the meantime, there’s a burgeoning flower demand to meet. India now accounts for less than 20 percent of Karuturi’s flower business, but the rapid growth of the Indian middle class is fast changing that picture. From college kids to middle managers to high-flying CEOs, everyone, it seems, wants to buy roses.
"This year, for Valentine’s Day, we were embarrassed by the demand," Karuturi said. "In fact, it was crazy – we had too many orders. We had to stagger our deliveries from February 14 to 17. In 2009, we’ll be delivering all through the week, not just on February 14.
He notes a growing sophistication in the Indian market; customers want chocolates, bottles of wine or cake to go with their rose orders, spending on average about $40 to $50 in 2008.
It’s not all one-way traffic for this Indian flower grower. Later this month (August) he’ll take delivery of his first batch of Australian flowers – waxflowers and proteas – imported from Craig Musson’s Wafex export business in Western Australia. With their long life, the flowers will retail in India as a premium product, Karuturi says.
-manish
Karuturi Global to sell 15% stake in Dubai arm for $100 mn
Abhineet Kumar / Mumbai September 23, 2008, 0:24 IST
World’s largest rose buds producer Karuturi Global is raising $100 million by selling a 15 per cent stake in its Dubai-based subsidiary.
The company will sell the stake in Karuturi Overseas to a private equity player valuing the Dubai-based subsidiary at over $650 million after the acquisition. The Dubai-based entity is the holding company for all the African business of Karuturi Global and contributed around 90 per cent of its revenues and net profit. The entity is currently valued at less than $250 million.
“The PE firm has valued the company for its underlying potential which would be achieved in the long term,” said an investment banking source familiar with the development. He refused to divulge the name of the PE firm.
The term sheet for the deal has already been signed and the formalities would be finished by early November. Managing Director Sai Ramakrishna Karuturi confirmed the fund raising plan through divesting stake to a private equity player. But he refused to divulge the details. Yes Bank is the advisor to the company for the deal.
The Bangalore-based company became the world’s largest grower of roses after acquiring Ethiopia’s Sher Agencies for $68 million last year, which took its annual production to 685 million stems from 150 million earlier.
The African business of Karuturi Overseas includes all the floriculture business in Kenya and Ethiopia. And it also includes its foray into agriculture products in Ethiopia. The products include palm oil, sugarcane, fresh-cut vegetables and cereal crops.
The company intends to expand cultivation to 1,20,000 hectares in the next five years, which is three times the size of Mumbai having 44,000 hectares of land. Karuturi Global, the parent company of the Dubai subsidiary, was down by 2.41 per cent to Rs 20.25 a share on the BSE on Monday.
source: BS
Promoter group company Rhea holding has acquired 29 lakh shares so far in the month of October08 from open market purchases.
-manish
Karuturi Global Ltd has informed BSE regarding a Press Release dated October 20, 2008 related to commencement of Company's Agriculture operations in Ethiopia.
Press Release:
"Karuturi Global Ltd, the worlds largest growers of roses with presence in India , Kenya, Ethiopia, Dubai and Holland has successfully launched its foray into agriculture segment of its business by commencing operations on 11,700 hectares of land in Bako, Ethiopia. This land is used for the cultivation of Maize, Rice, vegetables and other commercial crops.
Honorable Minister of State for Commerce Mr. Jairam Ramesh along with the Indian Ambassador to Ethiopia Mr. Gurjit Singh has attended the formal inauguration ceremony held in Holletta, Ethiopia, the Company's base in Ethiopia for floriculture operations on October 05, 2008. They expressed solidarity and support to the Indian community for making giant strides in business outside India. They also felt the need for more entrepreneurs to enter into agriculture sector which has got a huge growth potential in the coming years. Mr.Ramesh also has appreciated the Company for going ahead with its expansion plans even in these times of recession.
Mr. Sai Ramakrishna Karuturi, Managing Director of Karuturi Global ltd has said that "this venture of entering into agriculture sector has given me more satisfaction as an human being than as a business man, as this will initiate the Company’s endeavor to meet up to 5% of the global food demand. In addition to this venture, the Company has also acquired additional 360 hectors of land in Wolliso, Ethiopia for the cultivation of roses."
"Import of machinery and other infrastructure into Ethiopia is underway and the entire project is expected to be completed by 2014. Agriculture segment of the Company's business is expected to contribute nearly 25% of the total revenues during financial year 2009,10 and by 2010-11, the revenues from agriculture is expected to exceed the floriculture revenues of the Company".
Diluted EPS of 0.72 /- per share for Q2 FY09. Other highlights:
1. Karuturi Foods pvt ltd and Flower Xpress pvt ltd has commenced operations.
2. Flower subsidiary has opened operations in BIAL and opened its first hyderabad outlet.
3. Food subsidiary has shipped more than 100 containers of Gherkins.
-manish
Karuturi Global opens latest boutique retail outlet in Bangalore
Karuturi Global Ltd the worlds largest rose exporter with operational and marketing presence across the world in its initiative for forward integration has opened its latest retail boutique store at Vijaynagar, Bangalore.
Karuturi already have 15 shop in shops in Bangalore and one boutique store at the Bangalore International air port. The Company had recently opened its first boutique store out side Bangalore at Jubilee Hills, Hyderabad.
Shri. Surya Rao Karuturi, Chairman of Karuturi Global Ltd has flagged off this new boutique store at Vijaynagar, Bangalore this morning.
Speaking to the gathering at the inauguration ceremony, he expressed his willingness to go in for further strategic tie-ups with leading retail chain stores across the country for expanding its network. The Company already has an understanding with Odyssey group, a leading retail brand for spreading its presence.
Operating under the brand name 'Flower XPress', this store will cater to middle and high end customers with diverse products ranging from fresh flower bouquets, dry flowers, hand made vegetarian chocolates, scented candles , decorative plants and other gift articles."
Dec08 2008
Karuturi Global Ltd has informed BSE that the Company has concluded a new contract for supply of 50 million roses, an increase of 28% over 36 million roses supplied in the previous year, from Edeka, one of the largest super markets network in Germany. This order comes at an increased price ranging from 20% to 33% above that of the price received this year. This order will be executed through its various production facilities.
The Company also has recently started supply of roses to Jambo, a reputed supermarket chain in Holland. Currently 75% of the Company's production is on firm price contracts with leading super markets as customers. The Company is currently negotiating contracts for the next year and expects a significant price increase from that of the previous year. The Company also is on the threshold of getting Fair trade certification in addition to it's exiting certifications of MPS and Fair Trade Fair Plant certifications.
This export order is one of the largest deal of its kind in the $80 billion global out flower industry. With this order, cut roses from the Karuturi’s stable will find themselves on the shelves of some of the leading super market chains across Germany, United Kingdom and France.
This new contract is a testimony to the faith reposed by customers on Karuturi’s quality, commitment, timely supply and strong customer relationships.
-manish
Ethiopian corn from Karuturi to hit markets soon
25 Dec 2008, 0237 hrs IST, Arun Iyer, ET Bureau
BANGALORE: Floriculture company Karuturi Global, which is in the process of diversifying into agricultural crops, expects to begin sales of corn
from its Ethiopian operations in the first quarter of 2009 with sales of around 78,000 tonne during the three-month period.
“We are in talks with various buyers, especially in South America and the Common Market for Eastern and Southern Africa. In both these markets, corn sees high human consumption. With global demand for corn being high, we are looking at increased sales for human consumption and production of animal feed. We expect gross sales of Rs 65-75 crore,” CMD Ramakrishna Karuturi said.
According to the London-based International Grain Council, the global production of corn in the 12 months to June 2009 is seen at 775 million tonne, a shortfall of 12 million tonne.
On the floriculture business, Mr Ramakrishna said Karuturi Global is seeing robust sales for Christmas and New Year, with shipments of 40-42 million rose stems.
“Contrary to popular perception that slowdown impacts sales, we find sales getting diverted towards flowers as they are relatively more affordable than other gift items such as apparel or perfumes,” he said. The company is hoping to ship some 12 million stems of red roses for Valentine’s Day in February and another 30-35 million of assorted colours.
Karuturi recently won orders for supply of flowers to two supermarket chains in Europe — Edeka of Germany and Jumbo in the Netherlands.
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