Temasek invests $104m in Godrej’s agribusiness unit
Temasek Holdings has paid INR5.72 billion ($104.5 million) for a 19.99% stake in Godrej Agrovet, an agribusiness subsidiary of Godrej Industries. The deal comprises primary and secondary tranches, with the former earmarked to support Godrej Agrovet’s expansion plans and the latter facilitating the exit of existing shareholders.
The company has interests that stretch from animal feed and palm oil to agri-inputs and poultry. Godrej Agrovet is the largest manufacturer of compound animal feed and related nutrition products in India, with an annual output of more than 1.1 million tons.
The palm oil business comprises 45,000 hectares of smallholder cultivation nationwide, while the poultry operation, run as a joint venture with US-based Tyson Foods, is best known for the Real Good Chicken and Yummiez brands.
Godrej Agrovet has 45 manufacturing facilities in total with 2,000 employees and a network of more than 10,000 distributors and dealers in rural areas. Sales reached INR24.6 billion in the 2011-2012 fiscal year.
"We remain steadfastly focused on our mission to improve the productivity of Indian farmers through innovative products and services that sustainably increase crop and livestock yields," Balram Singh Yadav, managing director of Godrej Agrovet, said in a statement. "We are aggressively expanding rural distribution, increasing our manufacturing capacities, and launching cutting edge technologies for farmers. We look forward to partnering with Temasek to further accelerate our performance."
This is Temasek's second investment in a Godrej Group company this year, following its acquisition of a 4.9% stake in Godrej Consumer Products for $136 million. The division is one of India's leading fast moving consumer goods players, with brands including Cinthol soaps and Good Knight mosquito repellents.
The Godrej Agrovet deal is by some distance the largest agriculture-related investment ever made in India, more than twice the size of The Blackstone Group's $50 million commitment to Nuziveedu Seeds in 2008. According to AVCJ Research, there have been four deals in the sector so far this year, totaling $30 million.
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