About Freshara Agro Exports Limited

Freshara Agro Exports engaged in the procurement, processing and exporting of preserved Gherkins and other pickled commodities from India to different countries of the world. The procurement process involves direct sourcing from accredited farms and farmers dedicated to sustainable agricultural methodologies. The Company concludes buy-back agreements with the farmers and in turn supplies the farmers the necessary sowing material such as seeds to the identified small and marginal farmers. They meticulously process the procured Gherkins and other pickled vegetables within their processing facility, adhering to stringent quality and preservation protocols prior to exportation. Gherkins are savored pickle vegetable relished globally & consumed in the markets of Europe, USA, Australia, Russia, etc. as a delicacy with other food items. Due to their rigorous quality assurance program, the Company is accredited by a number of leading organizations, including Food Safety and Standards Authority of India (FSSAI), United States Food & Drug Administration (FDA), Star-K Kosher, Agricultural and Processed Food Products Export Development Authority (APEDA), International Featured Standards, Brand Reputation through Compliance Global Standard (BRCGS), these food safety certifications ensures that all of their products meet or exceed industry standards and helps in exporting to countries like Russia, United States, United Kingdom, various countries in Europe, Middle-East, North America and South America, etc. The company has been recognized as a 100% Export House by Ministry of Commerce & Industry, Government of India.

Freshara Agro Exports Limited has been at the forefront of the processing and export industry for the past nine years, specializing in the production of high-quality gherkins, cucumbers and pickled vegetables. To ensure a consistent supply of high-quality vegetables, they have forged strategic partnerships with the local farmers of Tamil Nadu, Karnataka and some parts of Andhra Pradesh through their contract farming program. They are proud to have received prestigious awards, including the MSME of the Year for two consecutive years in 2024 and 2023 and as well as the esteemed ASSOCHAM award in 2022. 

AGRICULTURE AND FOOD INDUSTRY AND EXPORTS IN INDIA
The agriculture sector is the largest source of livelihood in India. The country is one of the largest producers of agriculture and food products in the world. In 2022-23, India’s agriculture sector growth rate was estimated sector growth rate was estimated to be at 3.5% and it was 3.0% in 2021-22. The gross value added (GVA) in agriculture and allied activities grew a targeted 4% for 2022-23. The first advance estimate of GVA in agriculture sector for 2023-24 is expected to be 5.5%. The country produces many crops and food grains such as rice, wheat, pulses, oilseeds, coffee, jute, sugarcane, tea, tobacco, groundnuts, dairy products, fruits, etc. 

During 2022-23, India’s tea production stood at 1,374.9 million tonnes. Coffee production during the same period was 352.0 million tonnes. while other products such as rice, wheat, maize, pulses, mustard, and sugarcane reached a record high production. The top crop-producing states in India are West Bengal, Uttar Pradesh, Punjab, Gujarat, Haryana, Madhya Pradesh, Assam, Andhra Pradesh, Karnataka and Chhattisgarh. Most of the wheat produced in the country comes from Uttar Pradesh, Punjab, Haryana, Madhya Pradesh, Rajasthan, Bihar, and Gujarat. Uttar Pradesh is the largest producer of sugarcane in India contributing about 48%.

India is one of the largest agricultural product exporters in the world. In April-January 2024, the overall value of export of agricultural products stood at US$ 38.65 billion. In 2022-23, the agricultural exports from India stood at US$ 52.50 billion. During 2021-22, the country recorded US$ 50.2 billion in total agriculture exports with a 20% increase from US$ 41.3 billion in 2020-21. In 2022-23, rice exports from India were valued at US$ 11.14 billion, as against US$ 9.67 billion in 2021-22, registering a growth of 15.22%. Rice is the largest exported agricultural product from India and contributed to more than 20% of the total agriculture exports during the year 2022-23. India’s agriculture sector primarily exports Agri & allied products, marine products, plantation, and textile & allied products. Agri & allied products exports were valued at US$ 37.3 billion, recording a growth of 17% over 2020-21. 

Coffee exports from India jumped by 12.3% to 1146.2 million tonnes in 2023, on the rise in instant coffee exports and re-exports. Higher exports of marine products, at US$ 8.07 billion in 2022-23, are benefitting farmers in the coastal states of West Bengal, Andhra Pradesh, Odisha, Tamil Nadu, Kerala, Maharashtra, and Gujarat.

India’s agricultural and processed food products exports stood at US$ 4.34 billion (AprilMay) in 2024-25. The exports for principal commodities in 2024-25 (April-May) were the following: 

➢ Marine Product: US$ 1.07 billion
➢ Basmati and non-Basmati Rice: US$ 1.96 billion 
➢ Spices: US$ 769.22 million 
➢ Buffalo Meat: US$ 551.78 million 
➢ Sugar: US$ 454.89 million 
➢ Miscellaneous processed items: US$ 302.07 million 
➢ Oil Meal: US$ 246.19 million

In FY24, India's agricultural exports are likely to touched at US$ 48.9 billion. As per the Economic Survey 2022-23, the government aims to make India a global hub for 'Shree Anna', the Indian Institute of Millet Research, Hyderabad will be supported as the Centre of Excellence for sharing best practices, research and technologies at the international level.

FOOD PROCESSING INDUSTRY IN INDIA
The food processing industry in India is still in its early stages, contributing less than 10% to the total food output. According to a Deloitte study on Level of Food Processing in India in 2020-21, processing levels were at 2.7% for vegetables, 4.5% for fruits, 15.4% for fishery, 21.1% for milk, and 34.2% for meat. Food and grocery market in India is the sixth-largest in the world. Food processing industry contributes 32% to this food market and is also one of the largest industries in the country, contributing 13% to total export and 6% of industrial investment. Gross Value Added (GVA) in Food Processing sector has increased from Rs. 1.61 lakh crore (US$ 24.60 billion) in 2015-16 to Rs. 1.92 lakh crore (US$ 24.43 billion) in 2022-23 (as per First Revised Estimates of Ministry of Statistics and Programme Implementation).

The market size of food processing sector in India is estimated to reach US$ 1,274 billion in 2027 from US$ 866 billion in 2022. India’s agricultural and processed food exports gone up to more than US$ 50 billion in 2022-23, accounting for 22.6% of the overall agri-food exports. The cold chain infrastructure created by 372 completed cold chain projects until October 2023, is as following: 

➢ 10.3 lakh MT of Cold Storage, Controlled Atmosphere (CA)/Modified Atmosphere (MA) Storage and Deep Freezer. 
➢ 335 MT per hour of Individual Quick Freezing (IQF). 
➢ 175.8 Lakh Liters Per Day (LLPD) Milk Processing/Storage.
➢ 1860 reefer vehicles.

As on 30th June 2024, Ministry of Food Processing Industries has approved 41 Mega Food Parks, 399 Cold Chain projects, 76 Agro-processing Clusters, 588 Food Processing Units, 61 Creation of Backward & Forward Linkages Projects & 52 Operation Green projects under corresponding component schemes of PMKSY. The food processing industries have recorded a cumulative FDI equity inflow of US$ 12.59 billion between April 2000- March 2024, constituting around 1.85% of the total FDI equity inflow in all sectors. Under the Atmanirbhar Bharat Abhiyan, MoFPI has implemented the "PM Formalization of Micro food processing Enterprises (PMFME) Scheme," offering financial, technical, and business aid to establish or upgrade micro food processing enterprises. The scheme, operational from 2020-21 to 2024-25 with a budget of US$ 1.2 billion (Rs. 10,000 crore), is aimed at supporting 2 lakh micro food processing enterprises. The Production Linked Incentive Scheme for Food Processing Industry (PLISFPI) was approved in March 2021, with a budget of US$ 1.3 billion (Rs. 10,900 crore) to be implemented from 2021-22 to 2026-27. A total of 172 food processing companies have been approved for assistance under the scheme as on 30th June 2024. It is aimed at incentivizing manufacturing, promoting innovative/organic SME products, and endorsing Indian brands internationally. Additionally, a PLI Scheme for Millet-based Products (PLISMBP) was launched in FY23 with an outlay of ~US$ 96 million (Rs. 800 crore).

India exports key processed food products such as pulses, processed vegetables, processed fruits and juices, groundnuts, guar gum, cereal preparations, milled products, alcoholic beverages, oil meals, etc. In FY25 (AprilJune) export of processed fruits and vegetables stood at US$ 459 million, Lives stock products at US$ 702 million and other processed foods stand at US$ 911 million.

During April-March FY24, processed fruits & Juices accounted for US$ 682.58 million, processed vegetables accounted for US$ 787.28 million, dairy products accounted for US$ 272.64 million, poultry products accounted for US$ 184.58 million, and miscellaneous processed items accounted for US$ 1326.24 million. Exports of processed fruits and vegetables increased by 9.34% year-on-year in April- February (FY23-24) while exports of livestock products increased by 12.72% and exports of other processed foods increased by 6.32% during the same period. Exports of processed fruits and vegetables accounted for 8.9% of total exports in April-February (FY24) while exports of livestock products and other processed foods accounted for 18.3% and 18.7%, respectively. India exported US$ 1,113.17 million worth of Ready To Eat products, US$ 497.87 million worth of Ready To Cook products and US$ 537.84 million worth of Ready To Serve products from April to December in FY24. The major destinations of RTE export during this period were the U.S.A, U.A.E, and Canada while the major export destinations for RTC export were Bangladesh, U.S.A, Nepal, and U.A.E.

INDIAN GHERKINS & PICKLED VEGETABLE EXPORT INDUSTRY
Gherkins, often referred to as “cucumber on steroids,” are small cucumbers that are harvested before reaching maturity and pickled in vinegar or brine. These tangy, crunchy delights have gained immense popularity in international cuisines, particularly as condiments, toppings, or ingredients in salads, sandwiches and hamburgers. 

Gherkins are exported under two categories—cucumbers and gherkins, which are prepared and preserved by vinegar or acetic acid and cucumbers and gherkins, which are provisionally preserved. Gherkin cultivation, processing and exports started in India during the early 1990s with a modest beginning in Karnataka and later extended to the neighbouring states of Tamil Nadu, Andhra Pradesh and Telangana. Nearly 15% production of the world’s gherkin requirement is grown in India. Gherkins are currently exported to more than 20 countries, with major destinations being North America, European countries and Oceanic countries such as USA, France, Germany, Australia, Spain, South Korea, Canada, Japan, Belgium, Russia, China, Sri Lanka and Israel. Apart from its export potential, the gherkin industry plays a key role in the creation of rural employment. In India, cultivation of gherkins is carried out under contract farming by around 90,000 small and marginal farmers with an annual production area of 65,000 hectares. Processed gherkins are exported in bulk as industrial raw material and in jars as ready to eat. The bulk production is still occupying a high percentage of the gherkin market. In India there are about 51 major companies producing and exporting gherkins in drums and ready-to-eat consumer packs. 

APEDA has played a significant role in promotion of export of processed vegetables and it has been providing financial assistance for development of infrastructure and enhancing quality of processed gherkins, products promotion in the international market and implementation of food safety management systems in the processing units. On an average, a gherkin farmer produces 4 metric tonne per acre crop and earns about ₹80,000 with a net income of ₹40,000. Gherkin has a 90-day crop and the farmers take two crops annually. Processing plants of international standards have been established here to cater to the requirement of foreign buyers. All the gherkin manufacturing and exporting companies are either ISO, BRC, IFS, FSSC 2000 certified or possess all the certifications. Many of the companies have adopted social audits. This ensures all statutory benefits are given to the employees. The APEDA is also focusing on value-addition of gherkins to increase the export value of the product.

In the year 2020-21, India had shipped 2,23,515 metric tonnes of cucumber and gherkins with a value of US$ 223 million and in 2022 India emerged as largest exporters of cucumbers and gherkins in the world. 

In Europe, imports have surged in Germany, Spain, United Kingdom, Netherlands, France, Italy and Greece. Exports surged 10% to US$ 218.76 million in 2022-23 from US$ 199.38 million in 2021-22. In the 10 months to January in FY24, India has exported gherkins to the tune of US$189.08 million. Until January, 2024, India exported gherkins worth US$ 15.66 million to Germany, making it the top importer after the USA.

FRESHARA AGRO EXPORTS LIMITED COMPETITIVE STRENGTHS
1. Good relationship with the contract farmers and other vendors ensuring availability of raw materials during off-season period
2. Support of efficient supply-chain enable them to have long-standing and deep customer relationships
3. Quality assurance and quality control of their products and as a result we received various awards and accreditations
4. Advanced in-house processing facilities with focus on cost competitiveness
5. Comprehensive product portfolio enables them to serve their customers spread across the globe
6. Demonstrated history of financial performance and a scalable business model

FRESHARO AGRO EXPORTS LIMITED STRATEGIES
1. Their industry-related skills and knowledge can be leveraged to diversify their customer-base and gain wallet share with existing customers by expanding their product portfolio
2. Expand their product reach globally and increase their production capacity
3. Adding more contract-farmers in different states to ensure the availability of raw material in every season
4. Further reduce operating costs, improving operating efficiencies and deploy new technologies

FRESHARO AGRO EXPORTS LIMITED RISK FACTORS & CONCERNS
1. They derive significant portion of their revenue from sell of Gherkins.
2. The company derives a significant portion of its revenue from customers located overseas, including in Russia, which is currently involved in a war with Ukraine.
3. Their revenues are dependent on their exports to their international customers.
4. Real or perceived product contamination could result in reduced sales, product liability and damage to their reputation, and subject them to regulatory action.
5. The Company has high debt-to-equity ratio in the past three Financial Years and for the stub period.