AgroTech Foods increases production capacity in India

India-based AgroTech Foods plans to invest Rs1bn ($18.52m) in the expansion of its production capacity and launch new high-margin products over the next two to three years – just two months after US food company ConAgra raised its stake in the company to over 50%.

The company currently has two plants in Uttarakhand and Hyderabad, and plans to increase the total number of facilities in the country to six.

The plan, which includes setting up a peanut butter plant in the state of Gujarat, will be funded internally by the company.

AgroTech Foods, whose mainline activity includes marketing of the edible oils, plans to launch variants that offer higher margins such as ready-to-eat meals, canned oil sprays, peanut butter in bottles and tubs, chocolate desserts and puddings as part of its effort to become a diversified food company.

Over a period of four years, the company’s retail presence has increased from one lakh store to three lakh stores and, by the end of 2013, AgroTech aims to have a distribution network of five lakh retail stores.

Agro Tech India CEO Sachin Gopal said that the company plans to increase shares in both its food business and gross margins for the benefit of its shareholders.

Two months ago, ConAgra acquired another 3.66% stake in Agro Tech for Rs518.2m ($9.5m), boosting its overall stake in the Indian company from 48.1% to 51.77%.

Earlier, ConAgra Foods CEO Gary Rodkin said that India represents an attractive growth market for the company and it plans to work with Agro Tech’s management team to expand its business and investment in this region.

Agro Tech Foods, based in Gurgaon, India, offers Sundrop-branded edible oils, shelf-stable pudding and peanut butter, Healthy World-branded dried green peas, Crystal-branded sunflower oil and ACT II-branded popcorn based on a licence from ConAgra Foods.