Softbank-Backed OfBusiness Announces Its Acquisition of Koeleman India Eyeing India’s Food Processing Industry Poised For Tremendous Growth.

OfBusiness, earlier known as OFB Tech Pvt. Ltd is a technology-driven financing and raw material procurement platform that provides financial solutions to small and medium-sized enterprises (SMEs) in India. The company was founded in 2015 by Asish Mohapatra, Bhuvan Gupta, and Ruchi Kalra with the vision of making credit accessible to SMEs through technology.

The acquisition of Bengaluru-based Koeleman India, a Dutch corporation Koeleman Foods International B.V. subsidiary, gives OfBusiness entry to Koeleman India’s state-of-the-art food processing unit in Narsapura, Karnataka, and its export markets. The divestiture is part of the Koeleman Group’s plan to streamline its focus on its core activities. The deal is estimated to be worth about $10 million.

Softbank-backed OfBusiness started as a platform to sell industrial goods, and it has raised investments from Softbank, Tiger Global, Norwest, Zodius and Matrix Partners. The company also has a presence in trading food and agricultural commodities.

Koeleman Foods processes fruits and vegetables like gherkins, olives, jalapenos, bell pepper and baby corn. It does private labelling of these products for large U.S., Europe and Australian food companies.

Sreeraj Krishnamoorthy, vice president of Singhi Advisors, the global investment bank which advised the Koeleman Group on the deal, stated that the Indian food processing industry is seeing many transactions in the branded and private label space, and thus this transaction illustrates the growing appetite of large groups in expanding their opportunities in this high-growth segment.

The Growing Food Processing Sector In India

India’s food processing sector has witnessed significant growth in recent years. With a vast and diverse agricultural base, India has immense potential in the food processing industry. The government’s push for ‘Make in India’ and ‘Atmanirbhar Bharat’ has further given impetus to the growth of this sector.

The food processing industry in India is the fifth-largest industry in terms of production, consumption, and exports. The industry has grown at a CAGR of 10% in the last five years and is expected to continue growing at a similar pace in the coming years. 

One of the main drivers of the food processing sector in India is the increase in demand for processed and packaged foods. With changing lifestyles and increasing disposable incomes, consumers are opting for convenient and ready-to-eat food products. The industry has responded by introducing a wide range of processed foods, including snacks, dairy products, ready-to-eat meals, and beverages.

OfBusiness is now betting on the growing demand for these foods in India as people’s dietary habits change.

Thus, with the growing Indian market, this sector has seen a lot of momentum recently, with several significant companies expanding their product segments and new players entering the space.

Bengaluru-based Wipro group recently acquired Kerala-based ready-to-mix and spice company Nirapara. Dabur acquired Badshah Masala, entering the spice and masala segment. Bengaluru-based MTR Foods acquired Eastern Condiments, while ITC acquired Kolkata-based Sunrise Foods.

Facts And Statistics

The food processing sector in India has witnessed significant growth in recent years. Here are some statistics that highlight the growth of this sector:

1. India’s food processing industry is the fifth-largest in production, consumption, and export and is expected to reach a market size of USD 535 billion by 2025.

2. The sector has been growing at a Compound Annual Growth Rate (CAGR) of 10% in the last five years.

3. In 2020-21, India exported processed food products worth USD 37.73 billion.

4. According to a report by the Confederation of Indian Industry (CII), the food processing sector has the potential to attract USD 33 billion in investments and generate employment for over 9 million people by 2024.

5. The Government of India has allowed 100% Foreign Direct Investment (FDI) in the food processing sector through the automatic route, which has attracted significant investments from multinational companies.

6. The dairy processing sector has witnessed significant growth, with the production of milk and dairy products increasing from 146 million metric tonnes in 2014-15 to 209 million metric tonnes in 2019-20.

7. The snack food segment has also witnessed significant growth, with a CAGR of 15% in the last five years.

These statistics highlight the significant growth potential of the food processing sector in India. With favourable government policies, investments, and technological advancements, the industry is expected to continue its growth trajectory in the coming years.

In conclusion, India’s food processing sector has immense potential for growth, given the country’s vast agricultural base and increasing demand for processed foods. The government’s support and favourable policies have also contributed significantly to the sector’s growth.

With further investments and innovation, India’s food processing industry can significantly contribute to the country’s economic development.