In FY24, for Adani Wilmar, the sales volumes growth
continued at one of the fastest rates in the FMCG sector. We recorded revenue of K 51,262
crore, with an underlying volume growth of 10% YoY.
Building for a healthy growing nation
Dear Shareholders,
It is a privilege for me to present your Company's annual
performance report, as we continue to strengthen our leadership position in edible oils
and scaling up our Foods business.
I feel proud that Adani Wilmar continues to create a
positive impact in the lives of people by delivering products that promise uncompromising
quality, taste, and good health.
We are one of the very few FMCG companies in India offering
most of the essential kitchen commodities for households under a diverse range of brands
across a broad price spectrum. Our portfolio plays a crucial role in the lives of
consumers, gratifying ‘ghar ka khana' with all members of the family and friends,
with the warmth and conviviality that go with it.
Out of the five kitchen essentials (oil, rice, wheat, sugar
and pulses) that most households need every day in both urban and rural India, our quality
product portfolio ensures we are present in all of them as a reputed brand.
Our flagship brand, Fortune, is one of the most recognised
brand in packaged staple foods, with a reach of 11 crore households, which means presence
in every third household in the country.
Indian consumers have been showing the propensity of moving
towards quality and branded products, provided they get value-for-money. However, branded
penetration in most of the kitchen essentials in India has been lagging with only 5-15%
branded and has been primarily driven by regional players and very few pan-Indian players.
We witnessed the drastic shift to packaged form, from 15% to 70% in edible oils during the
last two decades. And we feel, we are well-positioned to take the leap for catalysing
similar shift in other kitchen staples too.
Adani Wilmar is well poised to serve the nation with
affordable packaged food across the length and width of the country, through its
integrated business model. Over the two decades, your Company has been consistently
investing in strengthening the supply chain -right from procuring at origin locations to
building large processing plants, developing efficient logistics and wider distribution
network till last mile retailer locations. Today, we have both infrastructure and
expertise across the value chain, along with the operational excellence to manage various
risks, particularly that arise from commodity price movements.
Indian economy is expected to grow in the range of 6%- 7%
for the next 10 years. This would significantly increase the per capita income, resulting
in faster transition towards the hygienic food products from trusted sources. We strongly
believe the volume growth in all the categories we are present is likely to grow
exponentially in the medium term.
As the category transformation happens to a higher branded
penetration, it brings along improved pricing power for the brands, particularly for the
strongest brands in the category. Additionally, our ability to offer premium variants and
value-added products, have contributed to gradual improvement of profitability over the
years.
In FY24, for Adani Wilmar, the sales volumes growth
continued at one of the fastest rates in the FMCG sector. We recorded revenue of H 51,262
crore, with an underlying volume growth of 10% YoY. It was broad-based growth across the
business segments, with volume growth at 9% YoY in edible oils, 16% YoY in Foods &
FMCG and 8% YoY in Industry essentials. Today, we have around 19% market share in ROCP
(Refined oil consumer packs) in edible oils. Our market share in consumer packs in atta
(wheat flour) is at 5.6% and in Rice at 7.7%.
In H1'24, the Company suffered losses on account of
commodity price movements, however, profitability normalised in H2'24, resulting in a
positive operating EBITDA of H 861 crore. Total operating EBITDA of FY24 was at H 1,135
crore, compared to H 1,661 crore in previous year. Strong profits from the branded
products during the year also mitigated the impact of inventory losses.
The Company has identified HORECA and branded exports as
additional growth drivers for our packaged staple foods business. Both the opportunities
are very large. HORECA customers also need kitchen essentials for their food preparation.
To capture its demand, Company is ramping up distribution network and dedicated sales
team, for providing HORECA customers customised services and offerings. ‘Fortune'
brand is well known to the
Indian diaspora settled across the world. Your Company is
developing a strong distribution model to serve the exports market and expand its market
presence.
As we step into FY25, your Company is expecting to continue
its strong growth rate, supported by stable price trends, robust urban demand, and a
gradual revival of rural consumption. A perceptible shift towards packaged form in food
has also been observed across urban, semi-urban and even rural markets, which is going to
be a strong tailwind for Adani Wilmar in the coming years. The ambition is to double Adani
Wilmar's volume in packaged foods in the next three years and continue to grow packaged
oils in double digits.
The organised food industry has an excellent opportunity to
address the nutritional needs of young India at scale and at low cost through
fortification of the kitchen essentials with vitamins, minerals, and other essential
nutrients. Plant-based proteins like soya derivative products and pulses are a sustainable
way to improve the protein intake of the large population of 1.4 billion people in India.
Your Company is also making strides towards minimising
environmental impact. Your Company was recognised by the Indian Railways for its
commitment as the largest transporter of edible oils via rail, leveraging the Indian
Railways' green freight corridors, and its commitment to transport ~25% of its volumes
through railways, reducing reliance on carbon-intensive road transport for long-distance
deliveries. For road movements, Company is shifting to Compressed Natural Gas (CNG)
vehicles, it is also offering incentives to operators and prioritising CNG
vehicles in operations for more efficient logistics. In
FY24, 7.6% volume of packaged oils & foods was dispatched by CNG vehicles. As a part
of Adani Wilmar's efforts towards expanding renewable energy usage, your Company has
installed solar panels powering its facilities and renewable sources, contributing to
approximately 11% of the Company's total energy consumption.
Besides, your Company is responsibly sourcing palm oil to
maintain environmental compliance. We are committed to sustainable packaging, with nearly
98% of materials being recyclable and a target of achieving 100% recyclability in near
future. Notably, we have eliminated plastic waste from our market operations.
Your Company is committed to further strengthening its
growth trajectory and market leadership through several strategic initiatives.
These include expanding and deepening our distribution
network across India, fostering growth in fast-growing alternate channels like modern
format stores and e-commerce, tapping the opportunities in HORECA (hotels, restaurants and
cafes) and exports, and increasing penetration of premium brands such as Fortune and
Kohinoor. Additionally, we are dedicated to optimising ROCE (return on capital employed)
through improved inventory management and calibrated capacity expansions in the medium
term.
I am confident that these initiatives will position your
Company for continued success in the coming years. In closing, I express my sincere
appreciation to all colleagues, customers, investors, bankers, business partners and
governments. Looking ahead, we remain committed to responsible growth, maximising our
business potential, and creating enduring value for all.
Regards,
Dorab Mistry
Chairman & Independent Director