Rice firm aims to double turnover by 2016
Turnover is currently £20M a year and we have had two fantastic years of growth. By 2016 we will be turning over £40M.
Here at our Felixstowe site we manufacture, produce and procure basmati rice, which is sold into the major multiples.
Indo European Foods is the European brand for Kohinoor, which was started in 1977 by three brothers in India. The three brothers were traders who used to sell rice and at that time in India packed rice was unknown; it used to be loose rice in big bags and you would buy it by the kilo.
Credit to the three brothers, they invented bagged rice for the retailers and started selling it in 500g and 1kg bags.
They started this business in India and built a plant near Delhi, which turned into a global business supplying rice worldwide to 66 countries. The business here was set up six years ago to secure the European market.
We supply rice to Tesco, Asda, Morrisons, Lidl and Booker – almost everyone. The good news is we supply our brand products to these retailers, so it’s not own-label – we just make the packaging exclusive to specific companies.
Investment (Return to top)
We’ve invested £800,000 in our packing line, which was required because it was semi-automatic and the number of people on it were a big cost to the company.
We decided to invest in the packing line in 2012, but it has taken time to get it in and working because it was bespoke.
On the processing floor we have a simple in-feed where the rice is cleaned of stones, glass and anything else that shouldn’t be there. Stage two is polishing, where stones in the machines mill the rice and polish it, making it look very nice and white but without breaking it.
A Sortex machine containing 36 cameras makes sure that any rice that is not white in colour is separated. For example, some grains can be yellow if they mature for too long. The Sortex machine removes them with a puff of air.
Rice is then automatically fed into bags on the new packing line, before they are taken on a conveyer belt to be stacked on a pallet and then automatically wrapped in film. A worker labels each pallet and transfers them to the warehouse by forklift truck.
Cut down costs (Return to top)
Before the investment you would have seen maybe another 10 to 15 people working on the floor, so it’s really cut down on costs for us. Now we have three people working on the floor at any time, saving nine people. We’re hoping to recoup the £800,000 investment within the next three or so years through the cut in staff.
The new line has also increased our output. This plant can now handle up to 20t an hour now, compared with 10t.
Before the investment, product was moving in to be milled quicker than it was coming out and this would create a build-up of rice, stopping the line, with associated costs to the firm. But with the investment we’re hoping to eliminate this.
We have around 743m2 of warehouse, but we’re about to increase this as we invest in new silos to store more unprocessed rice.
Unprocessed rice is stored in one-tonne bags, which presents its own problems, such as spillages and stacking restrictions.
Not only will the silos help us to store more rice around – 5,000t – but they will help keep our costs down and allow us to procure more. Manpower will be reduced again, as there will be fewer spillages to clear up and the need to offload 1t bags from ships will be eliminated, as rice is transferred directly into the silos.
We’re going to invest about £1M in the silos, but we’re having a bit of trouble getting planning permission from the local council. There are houses at the side of the factory and some of the residents are understandably concerned about what the silos will look like.
It might mean there is a height restriction on the five 1,000t silos we want to install. However, if the council rejects our application outright, we will have to look for an alternative solution.
I have been with Kohinoor for four and a half years and have seen a lot of growth in that time, so I am pretty happy. If you’re not growing, then you’re staying still and that's not what I want for the company.
It’s such a competitive market and the Indian side of the business has invested a lot of money and faith in the UK operations, so we have to do well. We want to take a bigger share of the UK market and the EU, so we don't have to rely on our Indian colleagues and can sustain ourselves.
I have been in the rice industry for 26 years and worked for two other rice companies before this one, so I like to think I know my rice.
Declining market (Return to top)
Dry rice is a declining market, but what can you do to innovate in dry rice other than introduce new packaging? We are competing with the likes of microwaveable rice that is pre-cooked and ready to eat after two minutes of cooking.
So we’re introducing new food lines inspired by Indian cooking. These are called Our Little Secret (OLS) range. They are rice-based products, which include value-added ready-meals as well as sauces. They are authentic products devised by the three founding brothers.
Already we get a lot of emails from people saying they like our sauces and ready meals.
Product innovation is very important to the company and has been a particular focus over the past 18 months. We have pumped a lot of money into advertising to support the new product development.
A lot of our growth in the UK is going to come from things like OLS. Our plan is to take a bigger share of the rice markets in the UK and Europe.
I think we’re doing a good job, though, and since this plant was established the Indian head office has taken a back-seat and is now focusing on developing business in the US and Dubai.
But there’s still a lot more to do. When we first came to the UK, the market was dominated by Tilda. Our aim is to change that.
Watch our exclusive video to learn more about Nayar’s views on hazard analysis critical control points and why he thinks they go hand in hand with food quality.
Factory facts (Return to top)
Location: 40 Langer Road, Felixstowe, Suffolk. IP11 2BW
Staff: 23
Products: Basmati rice
Customers: Tesco, Asda, Morrisons, Lidl and Booker
Turnover: £20M
Personal
Name: Sanjay Nayar
Age: 46
Title: General operations manager
Domestics: Wife, a 17-year-old daughter and a son aged 12
Outside work: I love playing badminton and, in the summer, I play cricket.
