New Delhi
: The Indian unit of Norwegian investment firm Orkla ASA, which sells spices and food products under the MTR Foods and Eastern Condiments brands in India, may complete a restructuring of its business within 12 months before considering a listing, a top executive said.
The company announced in October 2023 that its Indian operations would be reorganized into a single entity, Orkla India.
Orkla entered the Indian market in 2007 by acquiring packaged food company MTR, which specializes in pickles, spices, vermicelli and ready-to-eat mixes such as Indian rice cakes and poha. In 2020, the company acquired a majority stake in Kerala-based spice maker Eastern Condiments.
Orkla India currently has three business units – MTR, Eastern and International.
Notably, spices account for about 70% of its business.
“We did a pre-IPO (initial public offering) study; we presented it to the board and they said, ‘Why don’t you evaluate whether you want to consider the capital markets?’. That happened in June. So, we are evaluating. We are in a very early stage and whatever happens, it may happen around 2025,” Orkla India CEO Sanjay Sharma said on the sidelines of the India World Food Expo 2024 in the capital on Thursday.
The move marks the entry of yet another packaged food company into the public markets, following the success of several large companies such as Mrs Bectors Food Specialities Ltd (2020) and Bikaji Foods International (2022) on the exchanges.
The packaged consumer food market in India is valued at ₹4.24 lakh crore, according to a 2024 report by brokerage firm Anand Rathi.
Getting on track
Sharma said the restructuring of the newly formed company was underway and the integration of all businesses would take another 12 months to complete.
“We have three distribution systems in our company. From an HR perspective, we are creating a single process for the entire organization. On the manufacturing side, we have 11 plants… each with its own processes. We are looking at streamlining those processes. So, we are still in the process of integration, but deeper integration. This will take at least another year.”
After the reorganization in 2023, Orkla India became the sixth largest portfolio company of the Norwegian parent company, contributing about 4% of its annual business. In 2011, Orkla India also acquired ready-to-eat spice maker Rasoi Magic, which was a wholly owned subsidiary of MTR.
Orkla India’s financial year runs from January to December.
Sharma said that while demand was “fairly” good last year, the sluggish consumption this year is still a concern. According to data from global market research firm NIQ, in the second quarter of 2023-24, fast-moving consumer goods sales grew by 3.8% year-on-year, slowing down both the quarter-on-quarter and year-on-year growth rates.
“Last year, we finally ₹“We are in line with the painful experience that the industry has gone through so far with the weak consumption. The only good news for us is that while India has experienced food inflation, the spices market has seen deflation. So, we have seen a significant reduction in raw material prices. We have already cut prices on some of our packs,” Sharma said.
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