Fortune is a formidable brand, even last quarter it grew 16%, says Adani Wilmar CEO
Almost Rs 500 crore EBITDA run rate you have done this quarter. What are the factors at play for which this kind of performance is displayed?
One thing we must agree is that Adani Wilmar has a formidable brand in Fortune. When the industry did not show much growth, Fortune had shown a growth of almost 16% in this last quarter. As a result, our volumes have gone up and accordingly we have been able to pass on the price hike and maintained the flow. That is one of the reasons for doing well.
You are right in saying that it is the bigger brands, the leadersm which are successfully passing on the pressure. Others are succumbing to it. Talk to us about how much was the raw material pressure this time around and in that proportion what kind of price hikes were taken that got absorbed finally?
There has been an upward inflationary trend in raw material prices and edible oil prices have been going up. We have been very rational about increasing the prices only to the extent without which we cannot work. But being a strong brand, in this type of scenario, consumers generally rely more on stable and consistent brands like Fortune and hence volume growth has been seen. Price hikes have been commensurate with what the market has seen increase.
Do you think that the peak of inflation is already in the process or do you think that this uncertainty could lead to or in that situation raw material prices could remain at elevated levels even from here on?
One has been the weather factor in South America but the geopolitical affairs have taken a turn all of a sudden and one just cannot plan it. What happened in Indonesia was not expected by anybody. But I think it is a question of a week or two, before Indonesia releases the oil because after all it is a surplus producing country and 65% of their crude palm oil they produce are to be exported so I am sure the prices will come down. I think the peak is over.
At what capacity are you operating right now in terms of utilisations? What is the outlook on focussed areas in the coming quarters?
Presently we have a soft oil refinery that is a sunflower oil, soybean oil and mustard oil refinery. These are all running at around 65% to 68% capacity and which is fairly good and there is room to expand in terms of capacity utilisation.
In palm oil, we are still at around 45% but palm oil will be like this only because sometimes, the import of olein is workable and sometimes crude palm oil is workable. We shift between the two, depending on how the market is from the origin side. As far as capacity expansion is concerned, we are putting more focus on food. So more capacities will come in rice, wheat flour, pulses and besan.
For all the latest Business News Click Here
For the latest news and updates, follow us on Google News.