Agro Tech Foods sells its vanaspati brand, 'Rath', to Cargill India, an Indian unit of US -based Cargill Inc.

Agro Tech Foods announced Monday it sold its vanaspati brand to an Indian unit of US based firm Cargill Inc. Agro Tech Foods is an affiliate of US branded foods firm ConAgra Foods. Agro Tech Foods sold its Rath brand to Cargill India, Cargill Inc’s Indian unit. The investment transaction amount was however not disclosed. Agro Tech considered the vanaspati brand, ‘Rath’ as weak for its longer term strategy.

Agro Tech plans to increase its focus on value-added processed foods instead. The move was made despite the fact that Rath was a strong brand in vanaspati with excellent reach and a loyal consumer base. However, Agro Tech has only sold the 'Rath' brand name to Cargill and the deal does not include any technology or infrastructure transfer.

Cargill India manufacturers and sells a range of edible oils and hydrogenated fats under the NatureFresh, Gemini and Purita brands. The firm as well controls refined sunflower brand Crystal, premium refined edible oil brands Sundrop and Superlite, soyabean and sunflower oil blend NutraLite, sunflower and refined corn oil blend GoldLite and canola and sunflower oil blend FreshLite, Act II popcorn and Sundrop peanut butter and Snack Break Pudding.

ConAgra Foods has a 48 per cent stake in Agro Tech. Agro tech Foods Sales were pegged at Rs.188.50 crore for the quarter ended September 30th, 2010 against Rs.161.61 crore for the previous quarter of the same period. The firm’s net profit was at Rs.6.93 crore for the quarter ended September 30th, 2010 against Rs.5.36 crore for the quarter ended on September 30th, 2009.

In its announcement, Agro Tech Foods Vice-President for Human Resource and Corporate Communications, Narasimha Rao said Rath did not fit in Agro’s business strategy that focuses on value-added high margin products and as such, the firm does not intend to sell a vanaspati product anymore. As part of its long-term strategy, Agro Tech is focusing on value-added food products such as 'Act II' popcorn, Sundrop oil and peanut butter.

Rao further said Rath vanaspati's annual turnover is estimated at Rs 120 crore. According to him, Agro is continuously evaluating options to enhance the portfolio of value-added items and will launch new products in association with its US partner, ConAgra Foods.

Cargill is an international provider of food, agricultural and risk management products and services. In India, Cargill operates a number of businesses and employs several hundred people.

15 Nov 2010.