The third largest exporter of basmati rice from India, GRM Overseas Ltd has made plans to enter the domestic market due to the increasing potential for branded basmati, as said by Managing Director Atul Garg.
He mentioned, “In the first five years we are looking at a turnover of ₹ 1,000 crore. In the first year, we intend to generate revenue of ₹150-₹200 crore. The firm hopes to clock a turnover of ₹1,100 crore from its export business in the just concluded year.”
India produces around 20 million tonnes (mt) of basmati rice annually, of which approximately 5mt are exported. With growth being sluggish in the export front, the company wants to focus on the domestic market for topline growth.
It is interesting to know that, the 30-year-old listed company, with headquarters in Panipat, at present sells its branded basmati rice in 1,800 departmental stores in 30 countries. Europe and the Middle-East have been its major markets, followed by the US.
As per its expansion plan, GRM recently acquired a plant with a capacity of 400 tonnes per day at Gandhidham, close to Mundra port in Gujarat, for ₹13 crore. “This facility would take care of our export requirements, while Panipat facility will focus on the domestic market,” said Garg.
He added, “Currently the domestic basmati market is a little more than ₹45,000 crore. But the branded basmati market is just around ₹13,500-₹14,000 crore. GRM sees an opportunity to get into this branded segment of the Indian market, currently led by brands like India Gate and Dawat. “We see a lot of space in this segment.”
Till a few years ago, basmati rice sold was mainly in the range of ₹25-₹40 a kg. However, it has shifted to ₹50-₹70 and ₹50-₹120 a kg range.
Garg said, “While the domestic basmati market is more or less stagnant, an opportunity is there as a few players have vacated this space. The company plans to get into an aggressive campaign to promote its brand within the country.
The company is also planning to market speciality rice varieties like Govindbhog and Masuri in the international market as premium brands. It also plans to tap the overseas market for organic rice too.