Bharti Enterprises Looking To Exit Del Monte JV, To Focus On Telecom
Bharti Enterprises is looking to exit Del Monte Foods, its 50:50 joint venture with Singapore-listed packaged foods company Del Monte Pacific, executives in direct knowledge of the development said. The JV was set up to sell fruit juice drinks, olive oil, pasta, mayonnaise, ketchup and dried and canned fruits in India.
One of the executives stated to a leading media house that the Bharti group has instructed bankers to explore potential buyers for its stake in Del Monte Foods. The executive highlighted that food is considered a non-core business for Bharti, as the company aims to concentrate on its core businesses, specifically in the areas of telecom and broadband through Airtel. Additionally, the same executive mentioned that Del Monte has maintained its status as a small venture and faces challenges in competing with larger packaged foods businesses.
According to financial data accessed by a business intelligence platform, Del Monte Foods reported revenues of Rs 536.36 crore in FY23. Losses for the financial year stood at Rs 15.2 crore, the data showed.
Bharti Enterprises and global investment group E.L. Rothschild had formed an equal joint venture, FieldFresh Foods, in 2004, to produce and export fresh vegetables and fruits. Three years later, in 2007, the Singapore-listed Del Monte Pacific acquired 40.1 per cent stake in FieldFresh Foods for USD 20.8 million. Bharti continued to hold 50 per cent in the company, with Rothschild staying in the company as a minority partner
In 2021, FieldFresh Foods was renamed Del Monte Foods, which the company had attributed to creating a "sharper focus on branded processed foods and retail businesses".
Close to half of Del Monte's business in India is contributed by the retail segment, while the business-to-business or institutional segment accounts for the remaining part of the business. The latter includes ketchup, dried fruits and juice drinks it sells to quick service restaurants, airlines and other institutional channels.
"It is not yet clear if Del Monte Pacific plans to scale down its India operations and sell its products only through imports, or whether it wants to collaborate with other partners in India after Bharti's expected exit in the joint venture," the executive mentioned.
According to information on its website, the Del Monte Pacific group has exclusive rights to sell Del Monte processed foods and beverages in the Indian subcontinent and the Philippines. The company is dual listed on the Singapore Exchange and the Philippine Stock Exchange.
In India, players in the mayonnaise and condiments segment include Dr Oetker and Veeba, apart from Del Monte.
