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“We are planning to attain topline of Rs.3,000 crore”
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Monday, 27 April, 2015, 08 : 00 AM [IST]
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fiogf49gjkf0d  Synthite Industries Ltd is the foremost name dealing in spice oleoresin at the national as well international levels. George Paul, MD, Synthite Industries Ltd, shares details on the market and the growth that is envisaged in the coming years, in an email interview with Libin Chacko Kurian. Excerpts:
After a humble beginning, Synthite has now reached a stage where it is dominating much of the spice oleoresin trade at both national and international levels. What were the major milestones in the journey?
After the processing technology for oleoresin black pepper was standardised, we’ve been expanding the product line to all other spice oleoresins including essential oils. As a result of it, we have been maintaining the lead role in the industry till date. This was made possible by the collaborative strategy we have been adopting with our customers. As a cost optimisation philosophy, we have established a processing plant in China in addition to seven manufacturing facilities in south India. We are the topmost exporter of oleoresins ever since our inception. We have two joint ventures to our credit and are recognised today as a flavour house of repute. Our laboratory has NABL (National Accreditation Board for Testing and Calibration Laboratories) accreditation along with all quality certifications required for the food industry.
What makes Synthite different from competitors?
In order to make our products competitive, we’ve been following a strategy of optimising productivity; cost reduction, quality and customer relations as a continuous exercise. We follow both backward and forward integration as a sustainability initiative.
What are the various uses of oleoresin in the food and beverage sector? Which are the major clients in food processing sector that you supply to?
Oleoresins are flavour and seasoning ingredients that can be used both in processed food and beverage industries. Oleoresins have qualitative, quantitative and economic advantages over raw spices. So there is a preference to use oleoresins in the place of ground spices, major flavour and fragrance houses such as Givaudan, Kerry, Firmenich, IFF, Griffith Laboratories, Symrise, Frutarom and so on are our customers along with major food companies like ITC, Unilever, Kellog’s, Pepsi.
What are the current trends and developments in the food processing market according to Synthite?
Oleoresin was the logical step towards value addition over ground spices. But as a result of quality issues such as Aflatoxin, pesticide, and artificial dyes, we are compelled to establish contract farms to ensure traceability in the raw materials. Such backward integration steps are being pursued by market players increasingly. Other current trends are clean label products, by taking care of farm level production as well as extraction processing and technology.
Which are the important markets of Synthite, outside India?
We are a global supplier to the food and flavour industry and our key markets are the EU, US, Japan, Australia, Canada, China, Russia, South America, the Middle-East and Africa.
Synthite controls a large part of oleoresin export from India. How fast is the demand growing and what are the recent trends in demand by the consumers?
Growth is around 5-8% for the oleoresin industry. This rate could be further increased by providing the application knowhow to the food processor. Consumers today are increasingly knowledgeable and are interested to know what goes into their food.
What is the role of in-house R&D in developing new products and processing methods?
In-house R&D is extremely significant as far as the value-added sector is concerned. In view of the fast- changing trends in the processed food industry, customers are demanding innovative concepts rather than traditional recipes. R&D aids in developing new products and technologies for clean label products and solutions and cost optimisation of existing products.
What are the innovative products solely developed by Synthite for food and beverage industry?
A major breakthrough is straight extracts (free from solvents), ensuring flavour integrity and meeting the clean label status. We have also been adopting liquid CO2 extraction technology to meet customer-specific applications. We have launched natural colours customised for use in bakery products, dairy, confectioneries and beverage industries.
Ten months back Synthite became a B2C company from a prominent B2B company. How this change is moulding the company?
Although we have been in the food ingredient business for more than four decades, we didn’t have adequate experience or expertise in developing flavour or seasoning recipes for the food industry. Ever since the establishment of two joint ventures Symega Savoury Technology and Symega Flavours, we have acquired the knowhow for the manufacture of seasonings, curry blends and such other solutions for the food processing industry. That prompted us to make an entry into the retail market with our brand ‘Kitchen Treasures.’ We have the huge advantage of backward integration whereby we are able to procure 100% pure spices for the processing and distribution of the same for the Indian consumer.
We also have a gourmet brand called ‘Sprig’ for the high-end market sold through gourmet shops across the country. The retail entry has forced us to adopt a different approach towards marketing, which is entirely different from that of B2B marketing. New channels had to be established for distribution which we are embracing and we are excited about our newly launched e-retail page for Sprig.
Where do you see Synthite in the next five years, in terms of both new products and new markets?
We have an ambitious plan for the next five years to attain a topline of Rs 3,000 crore with a wide range of product line, both B2B and B2C. We have special focus on Chinese and South American markets for market expansion.
What are the new developments in Synthite, with respect to technologies and innovation?
As mentioned earlier, we are working towards all possible contemporary technology available in food processing either by way of inhouse development or by means of acquisitions. We are optimistic to remain a leader and a low-cost producer by capacity utilisation with optimum and robust sourcing.
How do you view FSSAI, quality standards set by government and the road ahead?
FSSAI is certainly a step in the right direction for quality assurance, but unfortunately there are many grey areas undefined in the policy. Once these are rectified, it is certainly a positive step and will be beneficial to the entire ecosystem.
What is the current annual turnover of Synthite and where do you see it in the next five years?
Current annual turnover is Rs 1,400 crore for Synthite. We are aiming at achieving a target of Rs 3,000 crore by 2020.
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