Amira Nature Foods Ltd (ANFI)

ANFI 
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Amira Nature Foods Ltd (ANFI)

Deutsche Bank Consumer, Retail, Gaming & Lodging Conference

March 6, 2013 12:00 pm ET

Executives

Karan Chanana - Chairman & CEO

Ashish Poddar - CFO

Rahul Nayar - Director of Global Communications and Strategy

Analysts

Eric Katzman - Deutsche Bank

Presentation

Question-and-Answer Session

Eric Katzman - Deutsche Bank

I’m Eric Katzman from Deutsche Bank, cover food companies, and very glad to have you all here. I see that the free lunch is working, so many of you have decided to stay, that’s awesome, but there also another good reason to be here and that is Amira Foods. Amira is represented today by Karan Chanana, who is the CEO and we'll -- I ask him some questions about the business. And Ashish Poddar, who is the CFO; also Rahul you might as well stand up, who is the Corporate Strategy and helps with Communications at the company at the moment.

We helped to take Amira public a couple of months ago. The company as had two quarterly results since going public, both of which have been excellent, and yet despite that there is actually been surprisingly little interest. I have been a food analyst for 16 years now. I have gone on countless marketing trips and I can honestly tell you that and whatever, however many times I have been on road meeting with clients going around the country, I think I’ve had two proactive questions about Amira in that time. And it’s a shame because the company has got some tremendous growth at the moment and some tremendous opportunities, but why don’t I start out with the Q&A here.

And so, for those I think it’s fair to say based on that, Karan, that there really is a lack of understanding of the rice market, and more specifically the basmati rice market. And so, maybe you could first of all talk a little about the history of the company and the growth that you’ve orchestrated. And then, also, touch on what is happening in the Basmati rice market today that is so compelling.

Karan Chanana

Okay. Good afternoon everybody. Thank you, Eric. I’m Karan Chanana, Chairman and CEO of Amira Nature Foods. I’m the fourth generation to own and head this nearly a century old company. I grew up in the business but sometimes it feels that life really began six years ago when I took over the business. In the past six years, I’ve successfully transitioned the company from being a family-owned and family-managed to a family-owned and professionally managed enterprise that it is today.

We’ve grown revenues from $50 million six years ago to over $400 million what they will be by the end of this financial year which ends March 31, 2013. In this time period from 2010 to 2012 we nearly doubled our EBITDA from $22 million to $40 million. We launched the Amira brand in 2008. In this short span of time, the Amira brands sells in 25 countries. We do our overall sales in 40 countries. Our growth rate revenue CAGR has been north of 25% over the last three years, our EBITDA CAGR has been higher over the last three years of 36%. All this we’ve been able to achieve with a clear vision which we set out to be an international specialty rice global packaged foods company.

Basmati rice, which is 70% of our revenue, is a specialty staple; it is grown in a defined but large geographies. You could compare it with Champagne. The product is unique it is classified as a super grain reason being it doesn’t only tastes great, it has great aroma, purely white hue, amazing texture, but it’s actually good for you and this planet. It has zero cholesterol, no gluten, very low glycemic index and it’s allergy-free.

Basmati rice also uses just over 50% of the water ordinary rice uses. The growing geography for this unique product is in the foothill of the Himalayas which gives its natural advantage. It is not dependent on rainfall for its irrigation; it is fed by the five rivers which come out of the Himalayan mountain range and the area have seen the farm incomes being higher than other areas enabling the farmer to be wealthier.

Basmati rice is not a commodity, you cannot trade it on an exchange; the tail doesn’t wag the dog at all. And it’s a packaged product sold at a supermarket shelf. We at Amira have set out a vision to grow this 40 countries we have currently to 70 countries; the 25 countries having the Amira branded presence will grow to 50 countries by 2017.

Eric Katzman - Deutsche Bank

And so, thank you for that. So talk to us about the motivation to go public and also how the process may have differed from your expectations going in. One of the things that I found very interesting because as many of you know companies go public today, many times we see private label getting out of -- and there is just a transfer of public versus private investments. But in your case what struck me as very compelling again is that you are raising capital to actually grow the business and that you didn’t sell any shares. So maybe talk a little about the motivation to go public, why you needed the funds and then how the – how you saw the – how you see the process?

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