Freshara Agro Exports Limited
Company
| Website 🔗 |  |
| Business Activity | Manufacture |
| Division | Food Processing |
| Sub-class | Pickled Vegetables |
| Location | Chennai, Tamil Nadu Tirupattur District, Tamil Nadu |
| Establishment Year | 2015 |
Management
| Managing Director | Junaid Ahmed |
| Educational Qualifications | Engineering degree from the College of Engineering, Guindy, Anna University, Chennai. MBA from the University of Liverpool, United Kingdom |
| Experience | Over 9 years of experience in the agricultural export sector, specifically gherkins and pickled vegetables |
| Annual Salary | ₹ 60 Lakhs |
| Total Number of Employees | 135 |
About
Freshara Agro Exports Limited produces and exports gherkins and other pickled vegetables. It has established itself as a prominent player in the gherkin and pickled vegetable industry, holding a 10% share in the Indian gherkin export market.
Products and Services:
Freshara Agro Exports Limited offers a variety of pickled vegetable products, including:
- Gherkins
- Baby Corn
- Banderilla
- Chillies (Bell Pepper & Jalapeno)
- Mixed Vegetables
The company provides its products in three main packaging categories:
- Industrial Packaging (Food-grade drums and pails)
- Food Service Packaging (Plastic pails and tin cans)
- Retail Packaging (Glass jars and tin cans)
Clients:
The company’s clientele includes a diverse range of customers across the globe, including:
- Multinational companies
- Retail chains
- Food brokers
- Traders
Manufacturing Process:
The company’s work processes include:
- Direct procurement of raw materials from accredited farms and farmers.
- Processing of the gherkins and other vegetables at their processing facility.
- Packaging of the processed products in food-grade drums, glass jars, and metal tins.
- Exporting the products to various countries across the globe.
Raw Materials and Suppliers:
The company sources its raw materials through a contract farming program, partnering with local farmers in Tamil Nadu, Karnataka, and Andhra Pradesh. This program ensures a consistent supply of high-quality vegetables while adhering to strict quality standards throughout the production process.
Other Key Aspects:
Awards and Recognition: The company’s commitment to excellence and innovation has been recognized through various awards and accolades, including the MSME of the Year award and the esteemed ASSOCHAM award.
Certifications:
Freshara Agro Exports Limited is accredited by several leading organizations, including the Food Safety and Standards Authority of India (FSSAI), the United States Food & Drug Administration (FDA), Star-K Kosher, Agricultural and Processed Food Products Export Development Authority (APEDA), International Featured Standards, Brand Reputation through Compliance Global Standard (BRCGS), these food safety certifications ensures that all of our products meet or exceed industry standards and helps in exporting.
Revenue – Category
Revenue – Region
Audit and Legal
Auditor’s Remarks:
The auditors have issued an unqualified opinion on the company’s financial statements.
Non-Compliances and Other Issues:
The company’s documentation mentions that they have incurred penalties in the past due to delays in filing GST returns. These delays were attributed to server issues and a vendor’s representative not filing the returns on time.
Contingent Liabilities:
As of September 30, 2024, Freshara Agro Exports Limited does not have any contingent liabilities.
Legal Cases:
Cases Filed Against the Company
Cases Filed by the Company
There are two legal cases filed by the company
Amount Involved: ₹19.73 Lakhs
Nature of Case: Cheque bounce case under Section 138 of the Negotiable Instruments Act, for the recovery of money
Tax Proceedings against the Company:
SWOT Analysis
Strengths
| Strong market presence and reputation: Freshara Agro Exports Limited has established itself as a key player in the Indian gherkins and pickled vegetables export market, holding a 10% market share. The company’s consistent delivery of high-quality products and services has earned it a strong reputation in the industry. |
| Efficient and robust supply chain management: The company has developed a robust and efficient supply chain, ensuring timely delivery and consistent product quality. This efficiency is a key competitive advantage, enabling the company to meet customer demands effectively and maintain long-standing customer relationships. |
| Stringent quality assurance and quality control processes: Freshara Agro Exports Limited places a strong emphasis on quality assurance and quality control throughout its production process. This dedication to quality has earned the company various awards and accreditations, enhancing its reputation and brand image. |
| Advanced and cost-effective in-house processing facilities: The company has invested in advanced in-house processing facilities that adhere to the highest industry standards. These facilities enable the company to produce high-quality products efficiently while maintaining cost competitiveness. |
Weaknesses
| Susceptibility to geopolitical and economic factors in key export markets: The company’s focus on exports exposes it to geopolitical and economic factors in key export markets. Economic downturns, regulatory changes, or political instability in these markets could adversely affect the company’s business. |
| Lack of long-term firm agreements with customers, leading to potential uncertainty in business volume: The company does not have firm, long-term agreements with its customers, leading to potential uncertainty in business volume and revenue predictability. Securing long-term contracts with key customers could provide greater stability and predictability. |
Opportunities
| Expansion into new international markets and diversification of customer base: The company has the opportunity to expand its global reach by entering new international markets and diversifying its customer base. This could reduce its reliance on existing markets and enhance its revenue streams. |
| Strengthening relationships with contract farmers in different states to ensure a consistent supply of raw materials: The company can strengthen its relationships with contract farmers in different states to ensure a consistent supply of raw materials throughout the year. This could involve expanding its contract farming program to new regions and providing additional support and incentives to farmers. |
| Capitalizing on the growing global demand for gherkins and pickled vegetables: The global demand for gherkins and pickled vegetables is increasing, providing an opportunity for Freshara Agro Exports Limited to expand its market share and capitalize on this trend. This could involve targeted marketing campaigns, participation in international trade shows, and strategic partnerships with distributors and retailers in new markets. |
Threats
| Competition from existing and new players in the gherkins and pickled vegetables industry: The pickled vegetable industry is competitive, with both domestic and international players. The company faces challenges in maintaining and growing its market share in the face of competition. Continuous innovation, differentiation, and strong customer relationships will be crucial to stay ahead of the competition. |
| Fluctuations in foreign exchange rates and raw material prices: Fluctuations in foreign exchange rates and raw material prices could impact the company’s profitability and financial performance. The company needs to implement effective risk management strategies to mitigate these risks. |
| Potential disruptions in the supply chain due to unforeseen circumstances: The company’s supply chain is subject to potential disruptions due to unforeseen circumstances, such as natural disasters, geopolitical events, or transportation issues. Such disruptions could affect the company’s ability to meet customer demand and impact its financial performance. |
Porter’s Five Forces1
| Threat of New Entrants | MODERATE |
| The industry requires moderate capital investment, technical expertise, and quality certifications, which can deter some new entrants. Established players like Freshara Agro Exports Limited have built brand recognition and customer loyalty, making it challenging for new entrants to gain market share. |
| Bargaining Power of Suppliers | LOW |
| The company sources raw materials from a large network of contract farmers, reducing the bargaining power of individual suppliers. |
| Bargaining Power of Buyers | MODERATE |
| The company’s reliance on a few large customers gives those buyers moderate bargaining power. Switching costs for buyers are moderate, as finding alternative suppliers can take time and effort. |
| Threat of Substitute Products or Services | MODERATE |
| There are various substitutes for pickled vegetables, such as fresh vegetables, other preserved foods, and ready-to-eat meals. Switching costs for consumers are low, as they can easily choose alternative products. |
| Rivalry Among Existing Competitors | HIGH |
| The pickled vegetable industry has a considerable number of players, both domestic and international. The industry is growing at a moderate pace, leading to increased competition for market share. |
Peer Comparison
There are no listed peers for a meaningful financial comparison with Freshara Agro Exports Limited
Green Box
IPO Funds:
Capital Expenditure:
- The company intends to use a portion of the net proceeds (up to ₹879.97 lakhs) for capital expenditure, specifically for purchasing new machinery for the production of gherkins and other vegetables.
- This includes a semi-automated production and processing line with a capacity of 6,000 jars per hour, along with ancillary machines to increase the production of various pickled products.
- The new machinery is intended for installation at their newly constructed manufacturing facility, Freshara Agro Exports Limited Unit-II, located in Chengallikupam Village, Vellore District, Tamil Nadu.
Funding of Working Capital Requirements:
The company plans to use a significant portion of the net proceeds (up to ₹5,600.00 lakhs) to fund its working capital requirements.
Industry Outlook:
Global Market Expansion:
The global gherkins market is projected to grow at a CAGR of 4.8% between 2024 and 2030. This growth is fueled by the increasing popularity of gherkins as a healthy snack and a versatile ingredient in various cuisines.
Favourable Conditions in India:
India is one of the largest producers and exporters of gherkins in the world. The country’s favourable climate and soil conditions, coupled with the adoption of advanced farming techniques, have led to higher yields and improved quality of produce.
Specific Growth Projections for Freshara Agro Exports Limited:
- The company’s projected revenue for the 2024-25 financial year is ₹24,000 lakhs, with orders in hand until July 2024 amounting to ₹9,635.56 lakhs.
- The company expects to achieve a turnover of ₹30,000 lakhs for the 2025-26 financial year, driven by growth in international markets, market expansion, strategic alliances, and increasing global demand.
Amber Box
Capacity Utilization:
The current capacity utilisation rate of Freshara Agro Exports Limited, as of September 30, 2024, is 85.55%.
Negative Operating Cash Flow:
Freshara Agro Exports Limited has not maintained a positive operating cash flow over the past few years.
Customer Concentration:
The company’s reliance on a few large customers for a significant portion of its revenue poses a risk. Losing any of these key customers could materially affect the company’s financial performance.
Red Box
Financial Leverage: Freshara Agro Exports Limited has a relatively high debt-to-equity ratio of 2.77 (as of September 30, 2024), indicating a higher degree of financial leverage. This could increase its financial risk and impact its ability to raise capital in the future.
Supply Chain Disruptions: The company’s supply chain is subject to potential disruptions due to unforeseen circumstances, such as natural disasters, geopolitical events, or transportation issues. Such disruptions could affect the company’s ability to meet customer demand and impact its financial performance.
Product Liability: As a food processing company, Freshara Agro Exports Limited faces product liability risks. Any contamination or safety issues with its products could lead to legal action, reputational damage, and financial losses.
Images
- The force value of “LOW” is considered good Click Porter’s Five Forces article for more information. ↩︎
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