In an interview with CNBC-TV18, Man Mohan Malik, Chairman and CEO, Himalaya International Ltd, spoke about the latest happenings in his company and sector.
Below is a verbatim transcript of his interview with CNBCTV18's Reema Tendulkar and Ekta Batra. Also watch the accompanying video.
Q: Could you tell us more about the memorandum of understanding (MoU) that you have signed with a UK based company? We understand this is for food production plant. What will be the total capacity of this? When does it come on stream?
A: We have singed joint venture with New World Paradigm (NWP), it’s a UK based company, expert in hydroponic and green houses. This will be the unique venture for the country like no one has ever ventured into hydroponic. You can understand that there is lot of shortages of vegetables and fruits going on the country and hydroponic is a system, here the yields are seven-eight times higher than the traditional system.
This project is interlinked with our existing food processing project. We have already marked fresh mushroom under Himalaya Fresh brand name in the domestic market and we are going to export these to the flying distance of four hours from India. So, all these vegetables and hydroponics and green house system will be exported to the countries in the Gulf countries, Japan, UK. We have lined up an investment of Rs 100 crore in the next two years for projects in joint venture.
Q: Can you throw some light on how exactly the revenue share agreement is going to be between New World Paradigm and yourself?
A: Himalaya International will hold 51% equity in the joint venture. Joint venture partners will provide the technical knowhow, they will provide marketing resources in all these export countries. They will bring in the investment to the tune of 49%.
Q: You spoke about total investment of about Rs 100 crore in the next two years. Could you break it up by telling us how much will be in the next year and then thereafter?
A: We are starting work on our Rajasthan agriculture resources in the current month. First, hydroponic system will be in operation by June this year. After that, we will multiply to various locations including our Gujarat location and Himachal Pradesh location.
Q: What is your revenue estimation from this entire joint venture?
A: This will add to our brand value, Himalaya Fresh being the key players in all natural healthier vegetables and fruits as fresh in the export market as well a modern retail chains in India.
Q: How much do you expect it to contribute to your revenue? How much of a percentage would you possibly factor in from this joint venture possibly in FY12-FY13?
A: The normal revenues from such system is around Rs 2 crore per hectare. We will have 100 hectare under our fold in the next two years. So, the total revenue should be in excess of Rs 200 crore in the next two years from this venture.
Q: Totally, what would your revenue projection stand at for FY11 and thereafter FY12?
A: Himalaya International existing food processing revenues are going to be around Rs 90 crore in the current financial year. Gujarat operation come in production by March this year, we will have the full run in the next financial year. 2012, our revenues from Gujarat and Himachal should be in excess of Rs 200 crore.
Himalya Intl stock price
On November 27, 2015, Himalya International closed at Rs 8.26, down Rs 0.02, or 0.24 percent. The 52-week high of the share was Rs 12.39 and the 52-week low was Rs 5.75.
The latest book value of the company is Rs 30.63 per share. At current value, the price-to-book value of the company was 0.27.
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