Just Food

Daily Newsletter

10 August 2023

Daily Newsletter

India’s Adani Group ‘mulls Adani Wilmar joint venture exit’

Adani partnered with Singapore’s Wilmar International to set up the snacks to pulses and edible oils venture in 1999.

Adani Group is reportedly considering selling its stake in the food venture with Singapore’s Wilmar International.

The Adani Wilmar partnership was set up in 1999 between the Adani Group company Adani Enterprises and Singapore-listed Wilmar International and is headquartered in Ahmedabad, India.

While the Mumbai-listed venture was an equally split joint enterprise, Bloomberg reported Adani holds 44% and is seeking to raise funds for investment in the group’s ‘core business’.

Adani Wilmar completed an IPO in 2022 after some delays, raising around Rs36bn ($434.7m today). However, under the Securities and Exchange Board of India’s rules, individual or public shareholders must own at least 25% of a business within five years of a listing, Bloomberg noted.

Adani and Wilmar’s stakes account for almost 88% of the joint-venture shares, the news agency said.

Citing sources familiar with the sale plans, Bloomberg said Adani has been exploring offloading its 44% interest for a ‘few months’, putting the value of that stake at about $2.6bn.

The Adani Group is headed up by chairman Gautam Adani. The billionaire and his family are considering retaining a ‘minority stake in a personal capacity’, Bloomberg said, citing its sources. Meanwhile, Wilmar International may decide to hold onto its interest, they said.

A spokesperson for Wilmar International said in a brief statement sent to Just Food: "We are unable to comment on Adani’s plans with regard to their investment in Adani Wilmar but as far as Wilmar is concerned, we remain committed to this investment."

Adani Wilmar said in a note filed with the Bombay Stock Exchange today (9 August): "We would like to clarify that we are unable to comment on media speculation and rumours and it would be inappropriate on our part to do so."

Just Food has also approached the Adani Group for comment outside of Asia business hours. Bloomberg added that a spokesperson declined to comment.

Adani Wilmar is headed up by CEO Angshu Mallick. The joint venture also supplies pulses, flour, edible oils, sugar and rice, including the brands Kohinoor, Fortune and Trophy Royale. It is also present in the home and personal-care products categories. The business runs 23 production plants across ten Indian states, according to its website.

In the year to 31 March, Adani Wilmar reported total revenue of Rs581.8bn, an increase of 7% over the previous 12 months. It posted profit after tax of Rs5.8bn.

Generative AI remains an untapped potential across the consumer industry

GlobalData estimates the total AI market will be worth $909 billion in 2030, growing at a CAGR of 35.2% between 2022 and 2030. The consumer goods, foodservice, and packaging sectors are undergoing digital transformation, accelerated by the COVID-19 pandemic and changing consumer preferences. AI can help companies operating in these sectors by significantly reducing costs and production times. In Nestlé's 2022 full-year results, the company announced a renewed focus on digitalization to drive growth. Financial and reputational pressures associated with supply chain disruptions and sustainability concerns are also driving interest in the digitalization of supply chains. Data science and ML are strong investments across all areas. However, the sectors cannot stop at AI-powered data analytics applications. They must also explore computer vision (CV), smart robots, AI sensors that automate manufacturing and distribution logistics, and generative AI tools that increase efficiency across corporate departments and customer service operations and enable innovation in product design. For the most part, the consumer goods, foodservice, and packaging sectors will not play a significant role in creating and developing AI hardware or platforms. Instead, these sectors will help scale up the adoption of AI technologies, such as CV, conversational platforms, and smart robots. This adoption will be driven by the financial benefits and potential cost savings AI automation delivers across global supply chains.