Vermicelli major to expand beyond Tamil Nadu

The company is a leading manufacturer of vermicelli operating in South India since 1984. The Dindigul-based Rs 230 crore vermicelli maker is now steered by second generation entrepreneurs – N Kamalahassan, MD and N Sugumar, ED. The duo took over the reins from their father in 2007, when the enterprise’s turnover was Rs 70 crore. Today, it is eyeing a turnover of Rs 275 crore for the fiscal 2017-18. 

“Our total monthly capacity currently stands at 4 lakh boxes. We are planning to add one-fourth of this capacity in each of the locations. This calls for an investment of around Rs 10 crore in each facility,” Sugumar said, noting that the enterprise had plans to get a fully-automated plant from Switzerland. For now, with a portfolio of 20 products including ragi vermicelli, rava dosa flour, samba rava, the company has 18 semi-automated factories in Tamil Nadu. He pegs the volume of the organised vermicelli market at 10 lakh boxes per month. 

Five more product launches are on the anvil, said Sugumar, who adds that the Special Economic Zones (SEZs) were being considered for expanding its presence in the neighbouring states. Apart from selling its products across TN, Karnataka and AP, the company also exports to Dubai and Singapore. “While vermicelli contributes 40 per cent of our revenue, international operations generate 4 per cent,” he said. With a focus on taking its export turnover past the 10 per cent mark, the company has created a new export set-up to drive growth. 

Sugumar also remarked that the rising fitness-conscious segment had boosted sales of its ragi semia, where it claims to have a monthly offtake of 70,000 boxes. This, in his words, constitutes to over 60 per cent of the market. “We are keen to emerge as a  pan-India player and in two years’ timeframe, we are looking to become a  limited company,” said the ED. 

Lending MSMEs a helping hand on new tax regime 

The firm prepared its 30-odd distributors in TN to make the smooth transition to GST from September 2016 onwards. It is now seeking to leverage its experience gained through this onboarding exercise. 

It launched ‘GST Mitr,’ a platform to facilitate GST registration targeting 10,000 retailers and wholesalers in the state. 

Having counselled their own distributors, the team was spurred to introduce this platform to help MSMEs. With an aim to provide 24x7 services, a 30-member team comprising CAs, advocates and industry experts will serve the business community. 

A helpline will also be available soon so that the process sharing can be seamless and the GST registration issues can  be resolved. Interestingly, though vermicelli has moved from the exempted category to 5 per cent tax rate slab, the company has decided to absorb the cost and  reduced margins.