FRESHTROP FRUITS LIMITED
ANNUAL REPORT 2005-2006
CHAIRMAN'S REPORT
Dear Shareholders,
Agro-industry's structure in our country has undergone a very significant
change during the year 2005-06. Retail, trade in India is moving from
unorganized road side outlets to well organized Malls and Supermarkets.
Many Indian Corporates have committed large investments to development of
this sector. Groceries and food products are a very important part of these
new and upcoming retail outlets.
Large wastage of agricultural produce is well known to all of us. It occurs
both in terms of loss of freshness and weight. It is also known that use of
cold chain for movement of agricultural produce from farm to consumers
would considerably reduce this wastage. As this is a chain operation, all
links have to be in place for it to be effective. One of the main links in
this cold chain is appropriate retail outlets. Organized retailing would be
this link; the other links are then expected to fall in place. We can
expect to get more nutritional and fresh agricultural produce available in
our markets in the near future.
Your Company has been in the business of supplies of fresh Indian fruits to
the world's largest and fastest growing Supermarkets like Walmart and
Tesco. We expect to use our knowledge and experience of this business for
supplies to the domestic retailers as well.
Exports continue to grow at a steady pace. Availability of fresh produce in
required quality has been the limiting factor for the growth of this
business. 2005-06 was the first year where we saw increased availability
and consequent reduction in procurement price of grapes. This is a healthy
sign as we can be more competitive in the international market while our
farmers continue to get good returns more out of larger production and
better yield than higher price.
Food safety continues to play a very important role in international trade
of fresh produce and traceability of the produce is the first requirement
of food safety. Your Company is the first in India and amongst the few in
the world to offer 100% traceability of its products through an on-line
internet based front-end to its ERP and SCM system which allows every
entity of the fresh produce supply chain to track and know the complete
history of the product and its origin. Your Company is also perhaps the
only one in India to deploy such advanced tools for business growth as of
today.
During the year your Company commissioned its third state-of-the-art post
harvest handling facility at Kaledhone in Satara district, in the state of
Maharashtra. This facility was set up in just 4 months and has a capacity
to pack and precool 15 Metric Tons of grapes per day. While it did
contribute to an increase in exports of grapes which grew by overall
59.11%, its full impact is expected to be observed in the year 2006-07.
Your Company is committed to the growth of its farmers. We organize field
excursions and interaction between the farmers and national and
international agriculture scientists to help them improve quality and yield
of their produce. Higher realizations for their produce results in their
increasing area under cultivation of export quality products which in turn
helps us increase sales. This also helps them improve their living
standards along with contributing to the literacy levels in the area. For
example, an English medium school has been set up in a remote village of
Savlej, 50 kilometers from Sangli, with a population of no more than 20000
people and is now attended by children from adjoining villages as well
Savlej is home to your Company's second unit which was established in
2002-2003.
In the fresh produce business dedication and hard work of all the
employees, especially during the season has contributed significantly to
your Company becoming the most preferred supplier of Indian fresh produce
to the most demanding customers in the world. Every employee of your
Company is committed to this endeavor and contributes effectively to its
growth in this sector which is now throwing up opportunities earlier
thought to be a distant dream in the Indian landscape. The management on
its part is exploring how these opportunities can be harnessed to take your
Company into its next round of growth.
We look forward to your support in taking your Company forward in these
very exciting times.
Ashok Motiani
Chairman & Managing Director