Mumbai-based Godrej Agrovet Ltd. (GAVL), a diversified food and agri-business company, has announced a significant move in the Indian processed poultry market. The company has signed a definitive agreement to acquire the remaining 49% stake in Godrej Tyson Foods Limited (GTFL) from Tyson India Holdings Ltd., an affiliate of Springdale, Arkansas-headquartered Tyson Foods, Inc., for $39.5 million. This acquisition will give GAVL full ownership of GTFL, which was previously a joint venture between the two companies.
The joint venture was established in 2008 when GAVL partnered with Tyson Foods to manufacture and market processed poultry and vegetarian products in India. GTFL has been operating under two main brands: ‘Real Good Chicken‘ for processed poultry products and ‘Yummiez‘ for vegetarian options. The company also sells live poultry birds in the market.
Balram Singh Yadav, managing director of GAVL, expressed gratitude for the partnership with Tyson Foods, acknowledging its role in modernizing poultry production and distribution in India. He highlighted that the collaboration allowed GAVL to leverage Tyson’s expertise in vertically integrated poultry processing and product development.
The decision to acquire full ownership of GTFL aligns with GAVL’s strategy to strengthen its branded business and expand its presence across different distribution channels. Yadav pointed out that the household penetration of frozen snacks in India is currently below 6%, indicating significant growth potential in this market segment.
In addition to the GTFL acquisition, GAVL’s Board has approved an initial investment of up to $13.5 million to establish a new animal feed plant in Maharashtra. This project will be funded through a combination of internal accruals and debt if necessary, demonstrating GAVL’s commitment to expanding its operations in the animal feed sector.
The transaction marks a significant change in the Indian processed poultry market, as it results in Tyson Foods scaling down its presence in one of the world’s largest economies after a 16-year partnership. The deal is expected to be concluded before the end of August 2024.
GTFL has a strong presence in the Indian market, with its products available in more than 35 cities across the country. In the fiscal year 2024, the company reported a turnover of $120.7 million, indicating its substantial market position.
It’s worth noting that Tyson Foods will maintain a presence in India through its technology unit, Tyson IT Solution, based in Bangalore.
The move comes at a time when GAVL is showing strong financial performance. In the first quarter of fiscal year 2025, the company reported a profit of $16.2 million, representing a 23% increase year-over-year. However, revenue for the same period decreased by 6% to $287.8 million.
This acquisition reflects GAVL’s confidence in the growth potential of India’s processed poultry and frozen snacks market. By taking full control of GTFL, GAVL aims to capitalize on the low market penetration and drive expansion in this sector while leveraging its existing strengths in the agri-business domain.
