Vinita Saraf, Chairperson and Managing Director, Manorama Industries

Right from the very beginning the Company has invested in R&D with a view to strongly cultivate a philosophy in innovation and quality, Vinita Saraf said.

Nov 05, 2020 03:11 IST India Infoline News Service

Vinita Saraf is the Chairperson and Managing Director of our company. She has completed her bachelor’s degree in commerce from Mount Carmel Girls College, Bangalore. She has over 18 years of working experience in the food processing, Flour and Oil fat industry. Her journey has been marked by ambitious and entrepreneur vision coupled with great vigor and hard work.

Her leadership has enabled Manorama group to achieve numerous milestones and also resulted in creation of a robust business model. She is the guiding force behind all the strategic decisions of Company and is entrusted with the responsibility of looking after the overall management and operations of Company.

In an interaction with Shweta Papriwal, Editor, indiainfoline.com, Vinita Saraf, Chairperson and Managing Director, Manorama Industries said “We  operate  in  an  attractive  sector  with  strong  growth  prospects,  underpinned  by  favorable  trends  such  as growth  in  population,  per-capita  food  consumption. We are tapping growth opportunities and the positive performance during this year was led by a strong growth in sales. The Bikroni plant has started full commercial production of all its units including the key process of fractionation. We are also in the process of considering making our Africa venture a wholly owned subsidiary of the company.”

What is Manorama’s business model? Especially the way you procure your raw materials and your supplier network.

Business model

Manorama Industries Limited is a global pioneer in the manufacturing of specialty fats from tree-borne and plant-based seeds, enjoying undisputed leadership as a key supplier to the world’s leading food, chocolate, confectionery and cosmetic companies. As the world’s only producer of Mango-based Cocoa Butter Equivalent (CBE), Sal-based Cocoa Butter Equivalent (CBE), Shea-based Cocoa Butter Equivalent (CBE) and Mango, Sal, Shea-based Specialty fats and butters, we set the benchmark in sustainable production of high value-added natural raw materials that are in huge demand with customers across continents. We as a company enjoy a global leadership position in the manufacturing and exporting of our product portfolio.

Right from the very beginning the Company has invested in R&D with a view to strongly cultivate a philosophy in innovation and quality. The focus on these heavy investments have been vindicated as today the products of our Company are approved and used extensively by leading manufacturers in food, chocolate, confectionery, beauty products etc., around the world. These products are 100% natural obtained from Tree Borne Seeds from the forests of Odisha, Jharkhand, Chhattisgarh, Madhya Pradesh and West Africa. The by-product, de-oiled cake is used in cattle feeds. Hence, there is no need for waste disposal. Thus, every product/by-product earns revenue for us.

Market position:
#1 in Sal, Shea and Mango Based CBE Globally
#1 in Sal based specialty fats in the World
#1 in Mango Butter in the World
# Supplying to global customers

Raw materials
Manorama business model is entirely forest based, deriving its entire raw material base from wild foresting. It has built a vast and unique supply network to source raw materials seeds over several decades, comprising of millions of forest dwellers, mainly women folk across thousands of villages in India and West Africa. This extensive supply chain keeps the company immune to supply- demand disparities and seasonal shortfalls. This network is well positioned to supply all the required raw materials to cater to our increased output requirements. There is limited concentration of risk as products derived from trees are renewable and the seeds ripen periodically in the Indian summer months.

By becoming a supplier of raw materials to Manorama, the forest dwellers (mainly comprising Women suppliers) have been able to earn a decent livelihood and become economically empowered. Manorama pioneered, innovated and co-created the use of seeds, extracted from the fruits lying on the forest floor, which otherwise would have become forest waste, in the application of various niche luxury products. In a way, Manorama has connected the MNCs and premium customers with the forest dweller community. This business opportunity has contributed to the upliftment of many such marginalised forest dwelling people. The company has adopted environment- friendly methods for procurement and processing of various exotic seeds grown spontaneously in the forests.

Manorama is committed to adopting practices that will lead to a more sustainable world. The Company is inspired by an abiding vision to create economic value to order to contribute towards a healthy ecosystem and build strong communities. Manorama Industries today is recognized as a pioneer in the concept of ‘sustainable sourcing and manufacturing.’ Several decades before the phrase “Corporate Social Responsibility” was even coined, the company had already involved millions of forest dwellers, farmers and village communities in collecting and supplying raw material for its unique business - without even a single tree being uprooted or a single family displaced!!

Who are Manorama’s customers? How have you managed to retain your relationships with your global MNC customers?

The Company has a rich history and proven record of accomplishment of customer retention and derives a significant proportion of its revenues from repeat business. Over the years, Manorama Industries has developed strong business relationships with large global food, cosmetics, chocolate and confectionery manufacturers with many of them being Fortune 500 companies. Through our unique collaborative, customer-centric approach, we bring together our customers’ requirements with our capabilities and skillset. By doing so, we develop innovative customer-specific solutions across many industries – Chocolate & Confectionery, Bakery, Dairy, Special Nutrition, Foodservice, Personal Care, and more.

The Company engages its in-house market research professionals to routinely monitor market trends and to conduct competitive analysis, while continuously tracking customer expectations. This intelligence, combined with the expertise of our research teams, is harnessed to develop innovative product and marketing solutions for our customers. The Company’s integrated marketing strategy has reaped rich rewards, with the Company securing notable orders for its Sal-based Cocoa Butter Equivalent and Shea-based Cocoa Butter Equivalent from buyers of world.

We have a strong customer base in India as well as globally in countries like Japan, Italy, France, Russia, Malaysia, Indonesia, Singapore, Netherlands, Germany, Sweden, Denmark, UK, USA, Europe, Australia, China, Korea, Portugal, Lithuania, Spain, Luxembourg, Vietnam, Armenia, Canada, Turkey, Philippines, Saudi Arabia, UAE, South America and South East Asia and other countries. These include global companies in Chocolate and Cosmetics industry.

We have a supply agreement with The Body Shop, a leading UK based, cosmetics brand, for the supply of Mango butter. Our association with Body Shop as a supplier speaks volumes about our efforts on the sustainability front. Body Shop has pioneered the concept of social audits with stringent selection criteria for raw material sourcing and supplier selection. Apart from Body Shop, we also export our products to other major Cosmetic manufacturers globally.

Furthermore, Body Shop has publicly acknowledged on its website the efforts of Manorama Industries to give the women’s cooperatives who are their suppliers training on harvesting methods, helping protect India’s mango trees and providing a sustainable source of income.

While building solid relationships with existing customers, Manorama is exploring new markets and tapping potential for new applications for its products both in chocolate/confectionery as well as cosmetic space, even as it explores emerging opportunities for its products in pharmaceutical and health supplement segments.

How do you see the newly increased capacity expansion serving Manorama? Are you planning to enter any new product lines?

With round the clock hard work, efficient planning and execution, Manorama has been able to set up the new greenfield state-of-art manufacturing facility in a record time and well within the stipulated budget. This is a testament of our team’s excellent project management skills and top-notch execution capabilities. This greenfield capacity now enables Manorama Industries with first mover advantage in the manufacture of premium specialty fats and butters in India and tap into the strong and growing demand for our products across the globe.

With this the total capacity of the company stands enhanced to 60,000 MT of seed milling capacity, 30,000 MT of packing and blending and 30,000 MT capacity of refining, fractionation, interesterification and deodorization each. We expect to achieve optimum production levels in the year 2020-2021. The commissioning of the new plant and the resultant capacity expansion makes Manorama Industries a leading Indian manufacturer in the global CBE and specialty butters & fats market, and will enable the Company to further ramp up its output for the unmet demand globally.

Additionally, Manorama plans to set Solvent Extraction Plant of 90000 MT which is expected to be commissioned in 2021.

From expanding Manorama’s product and segment portfolio perspective, we are looking at entering the business-to-consumer (B2C) segment and are currently developing a range of new products for this and the business-to-business (B2B) segment such as thermo-tolerant CBEs and chocolate spreads, cocoa butter replacers and chocolate-filled biscuits and bakery products. In addition, the Company is working on developing new product offerings in the Non-Palm Filling Fats category.

Explain about Manorama’s international operations?

Manorama AFRICA limited is a 100% owned subsidiary of Manorama Industries Ltd. Manorama Africa Ltd. is located at Tema, Ghana, West Africa. It is proposed to make this company a 100% owned subsidiary of Manorama Industries Ltd.

Manorama Africa Ltd. is into primarily procurement operations in Africa of Shea nuts found mainly in West Africa. It fulfils Shea Nuts requirement of Manorama Industries’ manufacturing facilities. The Company intends to set up Shea Processing facilities in Africa in the near future.

Replicating its Indian model of local-level networking in Africa, Manorama Africa Limited has tied up sizeable volumes of Shea nut supplies. Manorama Africa Limited procures Shea nuts from the bushes in Ghana through social organizations, women’s groups and local markets, besides sourcing supplies from neighbouring countries like Ghana, Burkina Faso, Ivory Coast, Togo, Benin, Mali, Nigeria and Savana Forest region.

Ghanaian kernels, for example, are considered the best quality compared with others. Their kernels have consistently lower free fatty acid levels and higher oil content and are less contaminated by moisture, charcoal from smoke fires and impurities.

What is the impact of Governments allowing 5% CBE to be used in chocolates?

In 2018, the Government of India permitted 5% use of CBE in chocolates which has resulted in a CBE domestic demand spurt since then. As per Indian regulations, CBE manufacturing is permitted only from Indian Sal, Mango, Kokum -based fats. This has resulted in the increased substitution by all major confectionery players of expensive cocoa butter with the cheaper alternative namely Cocoa Butter Equivalent (CBE), one of our key products, to realize considerable cost savings.

With strong expectations of the increase in 5% limit for the use of CBE in chocolates, the scope for growth is exponential. This positive development is expected to further strengthen our bottom line with higher pricing power.

What is the kind of R&D being undertaken at Manorama? How do you plan on moving up the value chain?

Manorama’s Research and Development (R&D) facility’s effort have has been recognized and certified by Govt. of India's Dept. of Scientific & Industrial Research (DSIR), the sole authority for granting R&D certification to companies in India. Manorama is one of the few companies in the country to achieve this prestigious milestone.

With DSIR recognition and certification, the company joins the elite club of 2000 companies in India who have this distinguished prestigious recognition and certification. Being the only Company in this segment with this certification in the country, we can now put our efforts for technology development and supporting the company by developing new exciting products in-house and launching new exciting products on a continuous basis. This lab will help in ensuring that these new products go through an intensive trial process before production batches are taken up to be shipped globally.

The notable achievements of the R&D efforts of Manorama Industries include in-house development of different stearin fractions used in the formulation of CBE, which is 100% compatible with cocoa butter. The R&D team tested the CBEs in different end user applications like chocolate tablets, countlines, filled chocolates etc. The new product was launched successfully after performing the shelf life test of the CBE and assessing both the texture and sensory evaluation.

The company has also developed the process of Solvent Fractionation for Fractionation of Shea, Sal, Mango Butters to produce stearin for CBE after investigating different fractionation conditions e.g. Temperature, Solvent Ratio & effect of crude materials.

Currently, the R&D team at Manorama Industries is working on a project to develop a more heat stable CBE which could will improve the thermo tolerance of chocolate products in hot climates. In a similar project, the team is also working to improve the heat stability in hot climates of hazelnut / chocolate spread which currently contain fractions from non-palm oil. Manorama Industries has different soft fractions available that can be used to develop temperature stable spread fats. These fats can be applied in either spread products or as soft filling fats and increase the thermo stability of such products.

As a leader in this industry, the DSIR recognition accelerates and further strengthens our commitment to further investing in R&D with a view to strongly cultivate a business philosophy in built on innovation and quality. The focus on these heavy investments have been vindicated as the products of the Company are approved and widely used by globally leading manufacturers in food, chocolate, confectionery and cosmetics sectors. Manorama has the following products under development:
B2B B2C
  • Thermo-tolerant Cocoa Butter Equivalent
  • Thermo-stable Chocolate/Hazelnut Spread Fat
  • Cocoa Butter Replacers
  • Aeratable Confectionery Filling Fats
  • Cocoa Butter Substitute – Reduced SAFA
  • Organic Glycerin, Sal Tanin Concentrate
  • Thermo-tolerant Chocolate Spread
  • Chocolate-filled Bakery/Biscuit Products
  • Chocolate Tablets
  • Filled-wafer Products

Currently you are a B2B play, do you plan to enter B2C segment? And how will you compete against the marketing might of established players with deep pockets?

Expanding its dominance in the B2B space, the Company is also planning to enter the B2C space with a new range of consumer products targeted through retail platforms and e-commerce channels, which will further accelerate growth.

Manorama plans to expand its product and segment portfolio and is looking at entering the business-to-consumer (B2C) segment and is currently developing a range of new products such as thermo-tolerant CBEs and chocolate spreads, cocoa butter replacers and chocolate-filled biscuits and bakery products. In addition, the Company is working on developing new product offerings in the Non-Palm Filling Fats category.

Apart from its core food, chocolate, confectionery and cosmetics segments, Manorama Industries is also broad-basing its product development to target the personal care & health Nutrition segments.

Five Years Road Map is as below :



8. Give us an overview of Manorama’s financial performance so far and the impact of Covid-19 on your business?

For full year ended March 31, 2020 (FY20) :
 Revenues from operations for the first quarter ended March 31st, 2020 (Q1FY21) stood at Rs 188.24 crore as compared to Rs 102.39 crore in FY19. Up 83.83% Y-o-Y
 The Company reported Earnings before Interest, Tax, Depreciation and Amortization (EBITDA) of Rs 49.80 crore in FY20 as against Rs 31.92 crore in FY19, up 55.99%. The Company’s EBITDA margin stood at 26.45% Y-o-Y
 Profit before tax stood at Rs 32.37 crore as compared to Rs 26.56 crore, up 21.86% Y-o-Y
 The Company reported PAT of Rs 23.33 crore for FY20 compared to Rs 19.06 crore, up 22.43%. The Company’s PAT margin stood at 12.39%
 The Company achieved Cash margin of Rs 31.00 crore as compared to Rs 19.87 crore for the earlier period, up by 56%
 Earnings per share (EPS) for the year end stood at Rs 20.94

Covid-19 Effect :
The Company does not foresee any significant decline in demand of the company products and is hopeful that it may increase due to increased consumption of chocolates and cakes due to Covid-19. The Company has made detailed assessment of its liquidity position for FY 2021 and the recoverability and carrying value of its assets. Based on current indicators of future economic conditions, the Company expects to recover the carrying amount of these assets.

With the Supply chain of the company remotely located in deepest forests, it is less affected by Pandemic, and company does not foresee any major effect on the same.

As operations of the company is coming to normal gradually, company does not foresee any material impact in terms of profitability of its products. However, it is difficult at this stage to assess the impact of COVID- 19 on the revenue and profitability for the whole of F.Y. 2020-2021. Enough caution is applied toward minimizing the costs so as to bring in cost discipline.

We shall continue to build upon and invest in the culture of innovation, empowerment, quality focus, customer-centric approach and foray into new geographies as we drive both value and volume-based business growth. This multi-prong strategy would enable us to realize the ‘Manorama of tomorrow,’ with a focus on profitability, sustainability, socio-economic welfare and ecological benefit, where qualitative and quantitative parameters are both of paramount importance.

9. What is your growth strategy and plans for the future?

With the global demand supply gap estimated to be around two lakh tonnes per annum, our Company has a vast pipeline of CBE and Specialty fats and butters orders to be delivered both domestically as well as globally.

For the future, we are confident of healthy top line and bottom-line growth and market share gains, backed by a strong, diversified product portfolio, our focus on R&D, superior product quality with adherence to best in class standards and competitive pricing. Our products are witnessing strong traction in the international markets as is evidenced by the swelling size of our order books and a sizeable export revenue.

Manorama Industries is well-positioned to capture over ~9-10% of the global CBE market by 2022. This makes it the only uniquely positioned company which can service the additional demand of Shea Based Cocoa Butter Equivalent (CBE) and Sal Based Cocoa Butter Equivalent (CBE) from India and abroad. The company  is  expected  to  achieve  production  at  optimum  level  in  the  year  2021-2022  and  is aspiring  to become  one  of  the  leading  Indian  manufacturers  in  the  global  Shea based and Sal based Cocoa Butter Equivalent (CBE)  &  specialty  butters  &  fats  market.

Five Years Road Map is as below : 



What is your outlook for the industry both from peers and your clients’ perspective?

Cocoa Butter Equivalent Industry
As per the report by Euromonitor, the demand for chocolates in India has grown substantially, from approximately at a CAGR of 6%, and the growth momentum is expected to continue in the years to come. Multinational companies like Nestle, Mondelez, Ferrero, MARS and Hershey have particularly dominated the market. The Indian chocolate industry is expected to grow rapidly to a consumption level.

Cocoa Butter Equivalent (CBE) is not only a more cost-effective substitute of Cocoa Butter, but it also ensures the same quality of the chocolate, while reducing the cost of the chocolate significantly. CBE is no different in texture, flavour and taste when compared with Cocoa Butter.

In India, the market for CBE is growing and is expected to benefit from the increasing consumption in line with the increasing population, the increased per capita consumption of chocolates and manufacturers switching to CBE in view of high cocoa butter prices. It is estimated that the global Specialty Fats & Oils market is expected to grow at a CAGR of 6.6% in terms of revenue. The APAC region is one of the largest markets of growth for specialty fats and oils, and will continue to be so with an expected size in terms of volumes.

Chocolate Industry
The European region is the highest consumer of Chocolates, with an annual consumption of 11 kg per capita. The majority of chocolate sales are accounted for by the US manufacturers like Mondelez International, Mars Inc, etc.

The worldwide consumption of chocolates is fast growing and the market is led by behemoths like Mars, Mondelēz International, Nestlé, Ferrero, Hershey, Lindt & Sprüngli.

The Indian chocolate market has seen a gradual shift of consumer preferences from traditional Indian sweets to contemporary substitutes, of which chocolates are the prominent ones. Six of the top-10 global chocolate manufacturers have already entered the Indian chocolate market, even as chocolates are gradually becoming a part of everyday consumption rather than occasional consumption. Moulded chocolates continue to be the favourite of the Indian market due to its rich taste and ease of availability.

The increasing tradition of chocolate gifting and the fear of adulteration in traditional sweets is also expected to be a major driver for the industry. Further, innovation in chocolate marketing and introduction of premium chocolates is also one of the biggest growth drivers for the Indian Chocolate Industry.

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