Hatsun Agro Product Ltd. (HAPL) announced that it is shutting down its ready-to-eat (RTE) business with immediate effect, citing losses for the past two years mainly due to the pandemic.
The RTE range, which included pizza and pasta, was manufactured and sold under the Oyalo brand.
The RTE business is contributing to HAPL’s annual sales of ₹30 crore, which is less than 0.5% of the total sales. “The RTE business is also not profitable with further low volumes,” the company said in a regulatory filing.
However, the move would not adversely affect profitability, HAPL said and added that the cost of closure was estimated to be around ₹17 crore.
The dairy product maker said it will buy a 26% stake in FP Cygnus Pvt. Ltd. and Huoban Energy 7 Pvt. Ltd. for captive consumption of solar power for its plants in Karnataka and Maharashtra.
HAPL said the milk products plant at Dharapuram in Tamil Nadu is expected to start commercial production by March 2022. This unit will have the capacity to produce one lakh kilograms of milk products in a day.
In addition, the company said it is increasing the monthly installed production capacity of its animal feed plant at Sangola in Maharashtra by 3,000 tonnes to 5,500 tonnes. HAPL said that trial production had begun and commercial production is expected to start by the end of February.
The company also announced the completion of land purchase for setting up a 3 lakh liters per day milk and milk products plant at a cost of Rs 100 crore in West Godavari district of Andhra Pradesh.
For the third quarter ended December, the company’s net profit declined 29% to ₹48 crore. Revenue from operations increased by ₹190 crore to ₹1,585 crore. Shares of the company closed 0.18% higher at Rs 1,115.60 on BSE on Friday.