LT Foods picks 30% stake in Netherlands-based Leev through subsidiary
New Delhi: LT Foods Ltd, which sells packaged rice under the Daawat, Heritage and Royal brands, on Wednesday said it has acquired a 30% stake in Leev.nu, a Netherlands-based packaged foods company, through its subsidiary Nature Bio Foods BV.
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The transaction allows Nature Bio Foods (NBF BV) an option to acquire a further 21% stake in Leev.nu at the end of five years, the company said in a statement.
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Leev.nu sells organic breakfast products, baking mixes, and health snacks largely in Netherlands.
Anders Invest, a private equity investor, along with Did-It, a trader of organic products, have also picked up a stake in Leev.nu BV.
To be sure, Nature Bio Foods works as a supplier of organic pulses, nuts, oils and rice to large global retail chains such as Walmart, Carrefour etc.
Leev.nu will start sourcing organic produce from NBF for its packed snacking brands.
“From a strategic point of view, it is critical that we build short supply chains. With NBF BV, a subsidiary of LT Foods coming on board, we can source our raw materials directly from organic farmers in India. Did-It offers a wealth of experience in worldwide trading of organic products. In addition, Anders Invest gives us the opportunity to grow & build a future organic platform through acquisitions,” Leo Voorwinden, director, Leev.nu, said in the statement.
For LT Foods, the deal will help Nature Bio Foods foray into the branded snacking market.
“Strategically, this acquisition gives NBF BV a reach to the consumers directly via the mainstream distribution strength of Leev. Currently NBF manages the farm to the doors of EU industries and brands, and now would be contributing to the full chain from farm to fork,” Vijay Kumar Arora, chairman and managing director, LT Foods Ltd.
Leev.nu will now have access to organic produce grown by Nature Bio Foods’ network of over 60,000 organic farmers.
The move comes at a time when LT Foods, which sells a variety of rice in India and exports to the West, has been expanding its presence in the packaged snacking market.
Last year, the company launched snacking brand Kari Kari in India. The snack is manufactured in India through a joint venture with Japan’s Kameda Seika which sells rice-based snacks. LT Foods set up a joint venture, Daawat Kameda India Pvt. Ltd, in 2017 to enter India’s snacking market. It subsequently started test-marketing Kari Kari in India in the same year.
For the financial year 2019-20, LT Foods reported a total income of ₹2,377.79 crore. It sells its packaged rice brands across the US, the UK, Europe, West Asia and Far East. It also has a range of organic food products, apart from selling rice-based sauces and snacks.