Know your business
In our endeavor to introduce new and highly mechanized systems, LT Foods Limited was first to introduce silos for rice and paddy storage in India by installing them for our own rice mills. It was a success. In the course of business, we had also seen silos abroad being used for storage of food grains, and adapting our rice model to this purpose enabled us to ramp up quickly to respond to the government’s bid.
Finalize the agreement before investing
PUNGRAIN, Punjab’s government authority, awarded us the tender and we were declared the selected bidders. On the basis of the government’s letter of award, we started working on the project. However, the government then reduced the fixed charges from the awarded amount. We learned from this that it is essential that in public-private partnerships, all documentation, including legal agreements, are finalized and signed by all parties involved before actual on-site work commences and investment by the private party takes place. This will ensure smooth and timely execution of the project and trouble-free operations thereafter.
Factor in all the benefits
Food storage in India isn’t just about food storage. It doesn’t belong in the storage category at all. It’s a food safety issue and a food security issue, and government should give it a higher priority. These types of projects cost more, but they also achieve long-term benefits. For example, silos reduce land use, compared to regular warehouses, so they free up the land, and also reduce labor cost. It’s a different kind of investment for the future.
—Vijay Arora, Chairman, LT Foods Limited
LT Foods Limited, a 40-year-old company, is one of the leading processors and distributors of rice and rice-based snacks. Its flagship brand, DAAWAT, is sold in more than 40 countries around the world.