Gujarat-based HyFun foods has embarked on an expansion plan which would see it migrating from a potato processor with established brand presence to larger frozen-foods company. It has set a target to increase its sales turnover to Rs 5,000 crore by FY29, 2.7 times the current level, a senior official of the company said.
Also, through its arm HyFarm, the company aims to increase potato procurement from 0.35 million tonne (MT) from 7,000 farmers to 1 MT of the staple vegetable from 30,000 farmers in four years, using contract farming model in Gujarat, Madhya Pradesh and Uttar Pradesh.
“While farmers who grow largely consumed “table varieties” of potato face fluctuations in market prices, those who cultivate processing-varieties of potatoes are insulated from price volatility through buy back arrangements by us,” Haresh Karamchandani, MD and group CEO, HyFun told FE.
In the beginning of last season, September, 2024, farmers were assured by HyFarm of buy-back prices of Rs 13.5/kg, which cost of the production of potatoes were around Rs 8-8.5/kg.
“With an average yield of around 13 tonne per acre, farmers had the net income of Rs 65,000 per acre from the four-month crops,” Karmachandani said.
Through HyFarm Paathshala, model demonstration farms in Northern Gujarat districts including Sabarkantha and Banaskantha have been set up for promoting best farm practices which significantly boost crop productivity of processing varieties of potatoes.
Soundararadjane S, CEO, HyFarm said “farmers associated with the company for the buy-back arrangements are provided with quality seed, nutrition applications plan based on soil health and real time digital advisory service”.
In the last fiscal, 30% of revenue was generated from domestic, while the rest of the sales income came from exports of potato products to 40 countries to quick service restaurants like Burger Kings, Pizza Hut and Domino’s.
Karamchandai said by FY29, the domestic market would account for 50% sales, and the rest, exports. The company reported turnover of Rs 1,350 crore in FY25.
While the company is planning to invest Rs 1000 crore for increasing potato processing capacity in the next two years, which is expected to boost HyFun’s sales turnover to Rs 1600 crore in 2025-26 and over Rs 2000 crore in FY27.
The company will be able to tap the capital market in the next 2-3 years to fund their expansion beyond Gujarat to key potato growing regions of Uttar Pradesh and Madhya Pradesh, Karmachandai said
HyFun follows ‘seed-to-shelf business model, which starts with contract farming for seed multiplication of processing varieties of potatoes and procurement of crops through a buyback agreement prior to commencement of sowing by farmers at the predetermined prices. “Contract farming assures incomes for the farmers while protecting them from market fluctuations,” the company official said.
The company, which started its commercial production in December 2015, became the industry leader in processing 0.2 MT of potatoes in 2021.