DFM Foods Ltd. Company History and Annual Growth Details

DFM Foods Ltd. has been promoted by The Delhi Flour Mills Co.Ltd., Shri R.P. Jain and Shri Mohit Jain. The Company was incorporated with the object of engaging in Flour Milling and manufacture of snack food products. The Company has since purchased two undertakings namely Jawala Flour Mills and Flavour Foods Division as running concerns from the promoter Company The Delhi Flour Mills Co.Ltd. The present installed capacity at Jawala Flour Mills and Flavour Foods Division is 1,50,000 tpa and 2808 tpa respectively. Jawala Flour Mills was originally owned by Dhanpat Mal Jawala Dass, a partnership firm. In the year 1989, the promoter Company The Delhi Flour Mills Co.Ltd. purchased the said mill from them and subsequently, in the year 1990-91 extensively modernized it. The Flavour Foods Division which is engaged in the manufacture of extruded Snack Foods was established by The Delhi Flour Mills Co.Ltd. in the Year 1984. These undertakings have been transferred to DFM Foods Ltd. w.e.f. 1st October, 1993. The performance of these divisions till the time they were spun off is as under : PRESENT BUSINESS OF THE COMPANY The company is engaged in the business of Flour Milling and Extruded Snack Foods. Flour Milling The Flour Milling industry is an old established industry in the country. The industry consists of about 600 mills located all over the country with an estimated installed capacity of about 10 million tonnes per annum. Wheat is the only raw material and the industry processes wheat into wheat products such as maida, rawa/suji, atta and bran. Maida, which is the principal product of the industry is used by the bakery industry for the manufacture of bread, biscuit, confectionery and various other bakery products. Besides the industrial use of maida by the bakery sector there is a fair amount of direct household consumption as well. Rawa/Suji is mainly used by the household sector and there is an increasing usage in the industrial sector for the manufacture of pasta products such as vermicelli, noodles etc. Atta is consumed by the household sector as well as by the restaurants, hotels and dhabas. Atta is the staple cereal diet in North India. Bran is used by the dairy industry as feed for the livestock. The growth in demand for wheat products is dependent on increasing urbanization as this creates a larger demand for convenient foods such as bakery products. The availability of wheat is governed by the agro climate conditions and can become a constraining factor in inhibiting increase in demand. However, the current position of wheat availability is very comfortable and this is reflected by overflowing wheat stocks with the Food Corporation of India and a record wheat harvest in 1994. Therefore, with the easy availability of wheat for the next few years, increasing urbanization, and rising income levels, the demand for the flour milling industry is expected to grow rapidly in the future. The company is advantageously placed to exploit the increasing demand, as it is located in a large metropolitan city which itself has a huge demand, is also located in the wheat growing belt, which provides easy access to raw materials and being located in Delhi can also serve other markets all across the country. This is because Delhi is the major trading centre for wheat products for up country sales. Extruded Snack Foods The promoter company was the pioneer in the introduction of the Extruded Snack Foods in the Indian market. Over the last 10 years it has invested heavily in establishing its brand names like CRAX, NATKHAT, WIZZ in the market. The consumers of the extruded snack foods are largely children in the urban areas. The Extruded Snack Food industry is still in its infancy and consists of about 10 plants located in different parts of the country. The marketing and distribution systems are critical in this industry and its growth is dependent on increasing urbanization and rising income levels. It faces competition from other snack foods such as potato chips and other children products both in the organized and unorganized sector. The promoter company, over the last 10 years has firmly established its brands in the market, has developed a strong distribution and sales organization to serve the North Indian markets and has also developed expertise in the marketing of these products. All these are being made available to the company and it is therefore advantageously placed to further expand the sales of these products. Further growth will also depend on the introduction of new products which too the company is in a strong position to do so. With increasing urbanization, rising income levels and changing life styles the company is confident of exploiting future increase in demand.