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By TPCI | November 26, 2019

Kanchan Metals Pvt. Ltd. has emerged as a strong player serving the domestic as well as the international brands with need-based solutions, ranging from food processing equipment to manufacturing ancillaries to even private labelling.

Sanjeev Gupta, MD, Kanchan Metals Pvt Ltd, has meticulously led the company to its present stature. Propelled by a passion for innovation, he has travelled across the globe to source the best processing techniques and technologies, which the company has tailored and modifed for use in India across diversified applications. Almost all big Indian brands like Haldirams, Bikanerwala, Godrej, Vadilal, Britannia, Nestle, Dabur, Amul, ITC Ltd etc. are presently Kanchan Metal’s clientele. It is a prominent provider of end-to-end solutions even for global players like JC Ford (US), Diosna (Germany), Masdac (Japan), etc.

Talking to Indusfood-Tech, Gupta shares his vision to make the Indian food processing industry fully-automated and take his business and the entire food processing sector, at-large, to newer heights. Following are few excerpts from the conversation:

Indusfood-Tech: Tell us about the company’s formation and growth story? How have you evolved as a business in India and abroad?
Sanjeev Gupta: Kanchan Metals Pvt Ltd. was established in 1984 as a family business diversification into non-ferrous metals. The company was determined to have a global business since its inception.

It was in the late 90s when we decided to enter into the food processing industry. We started our activities by teaming up with important global manufacturers of food processing machines and providers of technologies who were well proven in their countries; mainly it was US and Europe.  We were one of the first companies to enter into such activity in India.

Needless to say, it was challenging. Nevertheless, we were confident about doing this business. We were, at that time, working as a distributor and agent for such manufacturers across the globe and providing them with the end-to-end solutions to Indian customers in food processing sector; esp. in the snack segment in 1997.

As you know, the food processing industry in India is growing in a very big way, the opportunities kept on knocking our doors and thus from 2004 onwards, we kept on adding different solutions to our kitty every year. We started diversifying from snacks to other products like bakery, confectionary, meat processing etc. As a result, Kanchan Metals became a well-known player in this segment that can provide end-to-end solutions to the food processors in India in different segments.

Eventually, we also started venturing into private labelling, especially in the snack segment, to one of the largest FMCG companies, ITC Ltd. In 2012, we achieved another milestone by making snack food products as a private label to ITC Ltd. With two exclusive plants set up for ITC today, this association has turned out to be a grand success with large operations. We make extruded snacks for ITC, which they sell under the brand name BINGO and I am happy to mention that we are the largest manufacturers of these products for ITC.

In 2015, we decided to venture into making certain kind of machineries and auxiliary. Thus, we had set up another engineering unit in 2015, in which we make food processing machines and supporting equipment as well.  Today, we have an employee strength of 400+ people and have 3 manufacturing units, making Kanchan Metals one of the most preferred choices of the brands across the globe. Our turnkey plants, machines, equipment and ancillaries are widely used in industries ranging from dairy, meat processing, bakery, confectionary, instant foods, packaging and hygiene.

Indusfood-Tech: How do you see the snack market & business growing in India?
SG: The Indian snack sector is estimated to have a market size of Rs 30,000 Cr. Forty-four percent of this entire sector comprises of ethnic Indian namkeens. And this is just a data, which is mapped up by the research agencies. They have been able to lay their hands on published figures only to an extent. There are still a lot of untapped figures, which makes this sector highly unorganized.

However, a lot of big companies such as ITC, Sanjeev Goenka group, Britannia, TATA Group etc. are entering into this segment now. Thus, undoubtedly, snack foods is one of the largest growing segments today, but is largely unorganized. With changing tastes every few kilometers, this sector needs a lot of efforts and planning to get it organized.  

Talking about the possibility of the sector getting organized, I must say that, it is somewhat challenging. You see, as I mentioned, every few kilometers the eating habit changes in India. Moreover, Indians love to munch. As a result we have different food products around the corners of India which are very regional in nature. So, the marketability and sustainability of such regional snacks in other parts of the country becomes a concern. Until and unless that viability is seen, it is not possible to organize it at all.

However, we can say that with big brands taking a plunge into this sector, the industry is getting organized very fast, say at the rate of 30% YOY. And owing to the population we have, the snack industry in India is set for enormous growth.

Indusfood-Tech: What are the latest trends in evolution of packaging materials and technology? How are you adapting to them as a company?
SG: As far as machinery industry is concerned, automation is the new and most needed trend round the corner. As of now, the ethnic Indian snack industry is largely dealt with human intervention i.e., the processing is done manually to a great extent. It has a high potential for automation. Furthermore, we are all ready for making snack industry fully automated. To a great extent, things have been done. We do get lot of technology support from other countries.

Another trend underway is a plastic-free packaging. There are many options available. However, we, in India, are still a market, which is not ready to pay a high cost. Thus, the only challenge in India for plastic- free packaging is the price. The other being the materials, which are suitable to Indian climatic conditions, because the packaging material has to be good enough to retain the food product for a few months for consumption. That means there has to be a very strong oxygen barrier that had been provided by the plastics so far. Thus, while looking for alternatives to plastic, the driving factor is the oxygen barrier.

Now-a-days, a lot of paper and paper boat is being used in Europe as an alternative to plastics in packaging. We can also use it but it would never be the best one for long shelf life. However, plastics that are biodegradable can be another widely used option.

Another thing I would like to mention is that the trend in business has changed. Previously, the entire plant used to be imported. Now, only a certain critical equipment or machine in the process line is imported and the rest is made in India by us. So, today the plant we supply to our customers is a mixture of the imported and the self-made ones. For this we have tie-ups with the suppliers across the globe and we do the integration and interfacing to be a one point supplier to the customer.

Indusfood-Tech: How strong has been the role of the R&D for your business to be a success? Any major R&D/innovations that you might wish to share with us?
SG: We have been pioneers in automating some Indian ethnic snacks like Bhujia, fried dals, etc. This, of course, required a lot of R&D effort. I have gone around the world looking at different technologies for various process requirement. Eventually, we have modified and tailored it according to the needs of customers back in India. For example, we had used a certain technology to make bhujias in India, which was used in the meat processing industry in Europe.

So, R&D has been very important and critical for our business and is a must as without it one cannot develop into the business. We have achieved certain processes, which have become a big success for us in the ethnic Indian namkeen industry, specifically, where we have been able to develop large capacity automated continuous processing lines meeting all the hygiene standards, that too, without any human intervention right up to the final packing.

Secondly, we have done R&D in the food products themselves. We have partnered with our principals in various countries esp. Europe and US for engaging in R&D activity and developing new products. Thus, we have been first in certain products in India, which have been a commercial success. One such product was a baked snack unlike the regular fried snack, which is prevalent in India.

Indusfood-Tech: What has been the progress of your business on the export front and which are the main markets you have successfully penetrated? What are your future strategies to tap your potential target markets?
SG: We are looking for two things through Indusfood-Tech: one being the sale of our machineries and equipment majorly in the markets of EMEA region completely along with the South American market. The other thing we are looking for is sourcing new technologies from Europe and US region through collaborations. Another major thing is private labeling, for which we think the entire world is our market. As of now, we are working with countries like Germany, Italy, The Netherlands, France, Japan and USA.

Indusfood-Tech: How do you see the investment opportunities and the business environment for the food processing industry in India?
SG: For many reasons India is becoming better choice for investments. On fiscal policies, the government is trying to make a lot of changes. It is an endless situation. Recently, announcements have been made on tax reductions. Certain relaxations have been made for 100% FDI also. The fact that 100% FDI has been allowed in food retailing will give a boost to Indian F&B space.

Indusfood-Tech: How do you see Indusfood-Tech as a platform for the growth of the industry?
SG: Earlier our major target was the domestic Indian market. Since we have started manufacturing our own machines, we would like to tap the export markets more aggressively. For this, through Indusfood-Tech, we would like to collaborate more with high-end technology providers and tap buyers from across the globe for our indigenously tailored machines and equipment.

Indusfood-Tech: How do you see made in India to be perceived across the globe today?
SG: The perception of Made in India is dramatically changing very fast across the globe today. We are being perceived at par with the developed markets of Europe and the US. I will explain it in a very apt way. If I compare Made in India with Made in China, ours is a preferred product in reliability. Also, I would like to describe the Made in India tag as “Value for Money”.

I think today the world considers India and the Indian products to be much more reliable. Indians are traditionally known for their skills and that is why we have large Indian populace in foreign countries helping them to grow. The only challenge is how to utilize this potential. I must compliment the government that is continuously working towards this goal.