Jeyyam Global Foods Limited
Company
| Website 🔗 |  |
| Business Activity | Manufacture |
| Division | Food Processing |
| Sub-class | Bengal Gram |
| Location | Chennai, Salem, Tamil Nadu Mylvaram, Andhra Pradesh |
| Establishment Year | 2008 |
Management
| Managing Director | Amit Agarwal |
| Educational Qualifications | Bachelor of Engineering in Polymers from Maharashtra Institute of Technology, Pune |
| Experience | Over two decades of experience in the manufacturing of “Cans” for storage and packaging of paints. |
| Annual Salary | ₹ 6 Lakhs |
| Total Number of Employees | 155 |
About
Jeyyam Global Foods Limited is a food processing company specializing in producing Fried Gram, and Besan Flour from Bengal Gram (Chana). The company has a strong presence in South India, particularly in Tamil Nadu and Karnataka.
Products and Services:
Bengal Gram (Chana): Raw material for various products.
Fried Gram: Processed and packaged for consumer use.
Besan Flour: Ground and packaged for consumer use.
Jeyyam Global Foods is actively engaged in research and development to expand its product line into a broader range of kitchen essentials, including:
- Soya products
- Vermicelli
- Whole and split Toor Dal
- Urad Dal
- Moong Dal
- A variety of spices, masalas, ready-to-cook and ready-to-eat foods, salt, and sugar
Clients:
Jeyyam Global Foods Limited caters to a diverse clientele, including:
- Distributors
- Large retailers
- Hotels
- Restaurants
- Caterers
- Branded supermarkets
- Wholesalers
Manufacturing Process:
The process begins with the procurement of raw materials, primarily Bengal Gram, from local suppliers. The manufacturing process involves cleaning, grading, roasting, and grinding the Bengal Gram to produce various products.
Raw Materials:
The primary raw material for Jeyyam Global Foods Limited is Bengal Gram (Chana). The company also utilizes other raw materials, including packaging materials such as laminates, polyethene bags, non-woven bags, sacs, and cardboard boxes.
Suppliers:
The company sources its raw materials, primarily Bengal Gram directly from local farmers. Jeyyam Global Foods maintains long-standing relationships with its suppliers to ensure a consistent and reliable supply chain. Sources and related content
Distribution Network:
Jeyyam Global Foods Limited has an extensive distribution network that enables it to reach a wide range of customers across India. The company’s distribution strategy involves collaboration with various channels, including:
- Key Accounts: The company has established direct relationships with key accounts, which are typically large retail chains or institutional buyers.
- Wholesalers: Jeyyam Global Foods works with wholesalers who distribute its products to a network of smaller retailers and businesses.
- Distributors: The company has partnerships with distributors who play a crucial role in ensuring product availability across different regions.
- Supermarkets: The company’s products are available in various supermarkets, providing consumers with easy access to its offerings.
- Grocery Stores: Jeyyam Global Foods’ products are also distributed through a network of grocery stores, catering to local communities and individual consumers.
- Repackers: The company works with repackers who repackage its products into smaller quantities or different packaging formats to cater to specific customer needs.
- Co-operative Societies: Jeyyam Global Foods collaborates with co-operative societies to distribute its products, particularly in rural areas.
- Hotels, Caterers, and Institutions: The company supplies its products to hotels, restaurants, caterers, and institutions, catering to the needs of the food service industry.
Other Key Aspects:
Quality control is maintained throughout the process, ensuring adherence to FSSAI standards and ISO 9001:2015 and ISO 22000:2018 certifications.
Manufacturing Process Flowchart
Revenue – Category
Revenue – Region
Audit and Legal
Auditor’s Remarks:
The restated consolidated financial statements for FY 2024 do not contain any qualifications.
Non-Compliances and Other Issues:
Contingent Liabilities:
Jeyyam Global Foods Limited has contingent liabilities as of March 31, 2024. Here’s a summary:
- Claims against the company not acknowledged as debts: ₹72.00 lakhs
- TDS defaults with respect to delay filing fee, short deduction and interest thereon: ₹8.08 lakhs
- Income tax outstanding demand: ₹227.31 lakhs
Legal Cases:
Cases Filed Against the Company
M/s Maximus People Solution Private Limited v. M/s Jeyyam Global Food Private Limited:
This case involves a claim for alleged non-payment of dues to a management consulting firm. The matter is currently pending adjudication before the National Company Law Appellate Tribunal, Chennai Bench.
S. Venkatesan @ Venkatesh v. M/s. Jeyyam Global Foods (P) Ltd:
This case involves a petition filed by a worker seeking compensation for injuries sustained in an accident during employment. The matter is pending adjudication before the Court of Joint Commissioner of Labor, Salem.
Cases Filed by the Company
Jeyyam Global Foods Private Limited v. Vijay Kumar Bapu, Proprietor – T. Guruswamy Nadar and Sons:
This case involves a complaint filed by the company against a customer for issuing cheques that were returned due to insufficient funds.
M/s Jeyyam Global Foods Pvt. Ltd. v. Union of India – WP 215072, 4621, and more: These cases involve writ petitions filed by the company against the Union of India and other respondents challenging orders related to alleged misbranding of products. The matters are pending adjudication before the High Court of Judicature at Madras.
Tax Proceedings against the Company:
E-Proceedings:
The company has several e-proceedings pending with the Income Tax Department, including notices related to high payments of self-assessment tax.
Income Tax:
The company has outstanding income tax demands for various assessment years, totalling ₹227.31 lakhs as of March 31, 2024.
Tax Deducted at Source (TDS):
The company has TDS defaults for various financial years, totalling ₹8.08 lakhs as of March 31, 2024.
SWOT Analysis
Strengths
| Focus in the Chana Industry: Jeyyam Global Foods has a specialized focus on Chana-based products, allowing them to develop expertise in this specific area. |
| Manufacturing Technology with Automation: The company utilizes automated manufacturing processes, which can enhance efficiency, reduce costs, and improve product consistency. |
| In-depth Supply Chain Knowledge/Experience: Jeyyam Global Foods has a strong understanding of the Chana supply chain, enabling efficient sourcing and distribution of its products. |
Weaknesses
| Predominant Sales in the Bulk Segment: The company’s focus on bulk sales may limit its reach to individual consumers and smaller businesses. |
| Product Range Limited to Indian Cuisine: The company’s current product range primarily caters to Indian cuisine, potentially limiting its appeal to a broader consumer base. |
| Customer and Supplier Concentration: Top 5 customers and suppliers contributed more than 55% to total revenue and total purchases respectively |
Opportunities
| Changing Lifestyles of Indians: Changing lifestyles and dietary habits in India may create opportunities for the company to introduce new products and expand its market reach. |
| Growth in E-commerce Start-ups Delivering Groceries: The growth of online grocery platforms can provide new avenues for the company to reach consumers. |
| Leveraging the Brand to Expand Pan India and Introduce New Products: The company can leverage its brand recognition to expand its operations across India and introduce new products. |
Threats
| High Competition in the Packaged Food Business with Multiple Dominant Brands: The packaged food industry is highly competitive, with established brands posing a challenge to the company’s growth. |
| Government Restrictions on Import and Export: Government policies on the import and export of agricultural products can affect the company’s ability to source raw materials or expand into international markets. |
| Government Control on the Crop Prices: Government policies and regulations can influence the price of Chana, impacting the company’s raw material costs. |
Porter’s Five Forces1
| Threat of New Entrants | MODERATE – HIGH |
| Relatively low barriers to entry in the food processing industry, especially for smaller players. However, Jeyyam Global Foods’ established presence, brand recognition, and manufacturing capabilities provide a competitive advantage. |
| Bargaining Power of Suppliers | MODERATE |
| The company sources its primary raw material, Bengal Gram, directly from farmers, reducing reliance on intermediaries. However, the price of Bengal Gram is subject to market fluctuations and government controls, which could impact the company’s profitability. |
| Bargaining Power of Buyers | MODERATE |
| The company sells its products to a diverse range of customers, including distributors, retailers, and institutions. No single customer dominates the company’s sales, reducing buyer bargaining power. However, the company faces competition from other players in the market, which could increase buyer bargaining power. |
| Threat of Substitute Products or Services | MODERATE |
| There are numerous substitute products available in the market, including other pulses, cereals, and processed foods. The company needs to maintain competitive prices and differentiate its products based on quality and brand recognition to mitigate this threat. |
| Rivalry Among Existing Competitors | HIGH |
| The food processing industry is highly competitive, with multiple players vying for market share. Jeyyam Global Foods faces competition from both established brands and smaller players. The company needs to continue to innovate and differentiate its products to maintain its competitive edge. |
Peer Comparison
The company’s performance on various financial and operational metrics compared to its peers for FY 2024 is as follows:
| Key Performance Indicators | Jeyyam Global Foods Limited | Sameera Agro and Infra Limited |
| Revenue from Operations (Rs. Lakhs) | 62,981.00 | 18,214.07 |
| EBITDA Margin (%) | 5.23% | 8.03% |
| PAT Margin (%) | 2.40% | 5.89% |
| Return on equity (%) | 18.81% | 11.64% |
| Return on capital employed (%) | 26.27% | 15.46% |
| Debt-Equity Ratio (times) | 1.2 | 0.03 |
Green Box
IPO Funds:
Funding of working capital requirements:
The company plans to allocate ₹3,500 lakhs from the net proceeds to support its working capital needs. This includes managing inventory, trade receivables, and trade payables.
Capital expenditures:
The company plans to use ₹1,900 lakhs for capital expenditure. This includes the construction of a new manufacturing unit/storage area in Salem, Tamil Nadu, and the procurement and installation of plant and machinery for the production of Soya and Vermicelli.
Establishment of two Bengal Gram cleaning and grading units in Maharashtra:
These units will be strategically located at source locations in Maharashtra to streamline the procurement process and reduce transportation costs.
Setting up an integrated unit in Madhya Pradesh:
This unit will encompass Bengal Gram cleaning and grading, Fried Gram production, Gram Dal processing, and Gram Flour production, catering to the growing demand for Besan and Besan-related products in Northern, Central, and Western India.
Strong Industry Position:
Jeyyam Global Foods Limited is a leading player in the Chana-based food products market in India. The company has a strong track record of growth and profitability, with a focus on delivering high-quality products to its customers.
Export Operations:
The company is exploring opportunities to export its products to international markets, leveraging India’s growing reputation as a global food supplier. This expansion into export markets can significantly contribute to revenue growth and market reach.
Industry Outlook:
According to the Agricultural and Processed Food Products Export Development Authority (APEDA), food processing industry is projected to grow at a compound annual growth rate (CAGR) of 3% between 2022 and 2030.
Government Initiatives:
Government initiatives aimed at promoting the food processing sector, such as the Pradhan Mantri Kisan Sampada Yojana (PMKSY) and the Production Linked Incentive Scheme for Food Processing Industry (PLISFPI), can provide additional support and incentives for the company’s growth.
Amber Box
Dependence on Distributors:
The company relies on its distribution network to reach customers, which can pose a risk if there are disruptions or issues within the distribution chain.
Capacity Utilization:
Deevatipatti Unit (Tamil Nadu)
- Cleaned Chana: 79%
- Fried Gram: 74%
- Besan: 61%
Jammalamudugu Unit (Andhra Pradesh)
- Cleaned Chana: 34%
- Fried Gram: 20%
Negative Operating Cash Flows:
The company has experienced negative cash flows from operating activities in the past, indicating potential challenges in generating cash from its core business operations.
Seasonality of Business:
The company’s business is subject to seasonality, with the price of its primary raw material, Bengal Gram (Chana), fluctuating depending on the harvest season.
Red Box
Financial Indebtedness:
The company has a significant amount of financial indebtedness, primarily in the form of secured borrowings from banks and financial institutions.
Product Recalls or Legal Liability:
Non-compliance with food safety regulations or standards could lead to product recalls, legal liability, damage to the company’s brand reputation, and a negative impact on its financial performance.
Images
- The force value of “LOW” is considered good Click Porter’s Five Forces article for more information. ↩︎
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