Hatsun Agro Product stops its ready-to-eat business due to Covid pandemic hit.
Hatsun Agro Product (HAP), located in Chennai, would stop its ready-to-eat (RTE) operation, which included pizzas and pasta under the Oyalo brand, with immediate effect. ‘The Covid pandemic caused a tremendous hit to this business wing, and it was no longer possible to continue,’ stated RG Chandramogan, chairman of the company.
The shutdown would have little influence on the firm because it contributed only 0.5% of overall sales of approximately ₹ 6,000 crores, he told.
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The covid effect on RTE business
Due to Covid constraints, there were few consumers for RTE items made in Karur, Tamil Nadu. Hatsun was a small-to-medium-sized player in this market, while Oyalo was a newcomer. He stated that it was tough to continue this business for an SME brand.
‘We didn’t want to concentrate on RTE products excessively, but rather on known products like curd and ice cream. However, we will continue to provide other RTE goods, such as desserts,’ he said.
According to a company notification to the Bombay Stock Exchange (BSE), the cost of the discontinuation is projected to be roughly ₹17 crores.
The business will invest ₹3 crores in the paid-up equity share capital of FP Cygnus Pvt Ltd and Huoban Energy 7 Pvt Ltd, not to exceed 26% of the paid-up equity capital of the aforesaid companies, for captively using solar energy for the company’s facilities in Karnataka and Maharashtra, respectively.
At an update on current projects, the management stated that the milk products factory in Uthiyrur, Kangeyam Taluk, Tamil Nadu, with a capacity of 1 lakh kg per day, is expected to start commercial production in March.
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The current production capacity of the cattle feed mill at Sangola, Maharashtra, is 2,500 tonnes per month. Trial production for an extra capacity of 3,000 tonnes per month has begun, and commercial production is planned to begin by the end of February, according to the release. On the BSE, the company’s stock ended at ₹ 1,115.60, up 0.18 %, on Friday.