Sensex 27957.5 148.15 (0.53%)22-May-15 16:00
Nifty 8458.95 37.95 (0.45%)22-May-15 00:00
Desai Fruits and Vegetables earlier known as Desai Cold Storage is working towards reengineering the Indian agro landscape by pioneering new techniques and concepts in farming and packaging to make available quality agro products to the world. Desai Fruits and Vegetables has India's first integrated pack house facility located at Navsari, Gujarat. It is setting up its second facility focused on Banana in Jhagadia, Gujarat this year. The company has developed a unique edge as a result of applying a keen farmer insight, leveraging technology, implementing new ideas through R&D and incorporating international management practices. Desai Fruits and Vegetables is revolutionizing the Industry and setting new benchmarks that will enable the Company to emerge as a global player. It was the first company to export mangoes to U.S.A.
after the 18 year ban was lifted recently.
Pankaj Khandelwal, CEO, DFV holds a Bachelors degree in Computer Science and Engineering from the prestigious Indian Institute of Technology (IIT), Kanpur. After working as a software engineer at VeriFone India for two years, he did his MBA from Indian Institute of Management (IIM), Kolkata where he was awarded a Gold Medal for academic excellence. Pankaj worked as a management consultant with McKinsey & Company in Mumbai focusing on strategic and operational consulting across various industries. As an independent consultant his experience spans industries like light engineering, chemicals, meteorology, waste processing and fertilizers. He also advises top level corporate decision makers in entry strategies, cost reduction, organisation strategy, etc. Pankaj has a wide-ranging experience in supporting technical institutes
and universities in technology commercialisation, incubation, entrepreneurship development and industry interactions through technical consulting, technology research and training programs.
Q: Can you tell us about DFV?
A: Desai Fruit & Vegetables is an organisation focused on quality fruit/vegetable, best practice packaging, efficient processes and consistency. The organisation has over 2000 farmers (strongly growing) and is currently considered a leading quality exporter out of India. Over a year ago the financial holding company ?Contract Farming India AG? based in Zug, Switzerland purchased a majority stake in the organisation as we were convinced of the fundamentals of the organisation. Since then, international management has been put into place and extensive investments in further infrastructure, certifications, knowledge transfer have been put to work.
Desai Food & Vegetables Facility
Q: What are your flagship products?
A: The flagship products of the company are Mango, Banana and Pomegranate
Q: What other products are exported?
A: Apart from the above products there are 6 Fruits and 20 Vegetables that the company deals into like Papaya, Chikoo (Sapota), Green Chilly, Capsicum etc.
Q: How are the products/farm produce sourced?
A: The sourcing of Products is dependent primarily on the customer?s Quality and Volume requirements as well as the Geography to which the Product is being sent to. There are primarily three modes by which sourcing are done. In the Contract Farming (e.g. Okra) mode, we provide the farmer with the inputs (Seeds, Fertilizers etc.) and have a buy-back agreement for the harvest. In the Direct-Source Farming mode we directly source the product from the farmer after an initial field-survey. In the trading
mode, we directly source the product from the market and route it to the customer. In all these made proper quality checks are done at each link of the value chain to ensure that only the best quality product reaches the customer.
Q: What role does the parent company (CFI AG) plays in the operations of DFV?
A: In April 2006, Contract Farming India AG, a company based in Zug, Switzerland picked up a strategic stake in Desai Fruits and Vegetables. Supported by some of the well known investors of Switzerland and Germany, CFI AG has put in significant investments into DFV to enhance its financial, operational and management capabilities.? With this partnership, DFV is well on its way towards its mission to emerge as India?s largest exporter of fruit and vegetables. And in keeping with this aspiration, the Company?s immediate future plans include the development of a second integrated pack house for Banana, technology implementation for the on-going development of Golden Banana (G-9) and extending the supply of Banana to the domestic, Middle East and European markets.
Q: Various regulations regarding food safety have to be followed for exporting food products. How does DFV confirm to the regulations of various countries?
A: DFV is already in the process of getting internationally accredited certifications like ISO:22000 and EUREPGAP for its products so as to ensure Quality Control from ?Farm to Fork?. Proper Quality checks at each control-point in the Value Chain ensure that the consumer gets to eat only the best product available. For example, to ensure that Pesticide level regulations are maintained for the various products, DFV has a database of the ?Maximum Residue Level? requirements of the various countries to which the products are being exported. Based on this database, MRL tests are conducted in NABL approved Laboratories to ensure that the product meets the International Standards.
Q: What are the problems faced by this industry?
A: For the Fresh Fruits and Vegetable export industry the major challenges are increasing strength of rupee, setting up of an effective Supply Chain and International Competition. Right now the increasing strength of rupee seems to be the most critical challenge to handle for the exports industry.
Q: What are the R & D happening and their potential in this sector?
A: R&D in India when compared to Countries like USA is still at a nascent stage. I see a gap to be filled between the industry trends and what academia is doing. There is a huge scope of improvement there. Another major potential is in establishment of Vertically-Integrated Companies who are involved in both Sales and Marketing as well as R&D of the product so as to ensure that there is a proper information flow about the Industry Trends and Consumer Requirements to the Research and Development business function.
Q: How intense is the competition in this sector?
A: Competition in this industry is intensely growing two-fold. A company has to face competition not only from the Indian Exporters but also from the other countries exporting their products to the same destination.
Q: How does the Govt. Of India encourage the growth of this industry?
A: Government of India and its Bodies (e.g. APEDA) have been quite instrumental in product promotion by supporting exporters participation in International Trade Fairs. On the other hand, it also provides them product-specific Subsidies and Incentives to promote exports.
Q: What would be the roles MBA's in this industry?
A: MBA?s can play a vital role in this industry by bringing their Management Skills to the Market. The industry runs on similar business fundamentals as any other industry and therefore what one learns in a B-School is very much applicable in this industry.
This interview was taken by Miss. Puja Parwal of PGP-I, BIM Tiruchirapalli.
India Infoline Research Team / 14:59, May 20, 2015
GPIL reported 13.5% yoy decline in operating profit as the impact of higher volumes was offset by lower product prices