Date:15/03/2005 URL: http://www.thehindubusinessline.com/2005/03/15/stories/2005031502801300.htm

Back Focus on value added products lifts Lakshmi Overseas

Virendra Verma

Mumbai , March 14

THE Lakshmi Overseas stock, an integrated processor of non-basmati rice, has been on the rise in the last one month and has gained almost 50 per cent due to its focus on value added products.

In today's trading, the stock was locked in 5 per cent upper circuit at Rs 239.70 on the BSE with volume of 1.95 lakh shares. Brokers said the interest of investors in the stock has emerged as the company is one of the largest players in the domestic agro processing sector and the business model followed by the company is focused on non-basmati, long grain white-rice for the domestic markets.

In addition, value enhancement along the by-products chain is the new paradigm for the company said market players.

On the company's new focus on value added products, Fortis Securities said the quantum in which the by-products are derived and economies of scale have enabled the company to set up by-product processing plants, for further value addition. "With capacity enhancement on the anvil, higher contribution from value added products and power, we see a new story unfold on performance front," Fortis Securities said.

In the course of rice processing, the company is using rice bran (which has oil content) to extract edible oil.

Further, from the de-oiled cake obtained after extraction of oil is converted into cattle feed.

The company has an ISI certified branded product `Hira Moti' in the cattle feed segment, which increases realisation further by Rs 2 per kg.

To utilise the huge quantity of husk obtained, it plans to set up two co-generation power plants of 12 MW capacity each, further utilising another by-product.

The company is also increasing the capacity for its various products. The capacity for paddy is being increased from 2,100 tonnes per day to 3,100 tonnes per day (tpd), Nakku Rice (broken rice) from 100 to 200 tpd, Solvent Extraction from 200 to 400 tpd, Refinery from 30 to 60 tpd and cattle feed from 70 to 200 tpd.

Fortis said the new capacities are expected to be commissioned by September 2005 and would contribute towards the second half revenues of 2005-06 financial year.