Himalya International - A Turn around Story?

This is the first time writing a post about a company, I was a shadow reader in TED and ValuePickr.

Food processing sector in India

The Indian food processing industry is estimated at US$ 70 billion. According to the Ministry of Food processing, this industry contributed 9% to India’s GDP and had a share of 6% in the total industrial production. The food processing sector is a highly fragmented industry, it widely comprises of the following sub-segments: fruits and vegetables, milk and milk products, beer and alcoholic beverages, meat and poultry, marine products, grain processing, packaged or convenience food and packaged drinks.

Business Profile

Himalya International (HIL) was incorporated in the year 1992. The company is promoted by Manmohan Malik and Sanjeev Kakkar.

Himalya international is the first frozen food company in India that has been into processing of mushrooms, baby potatoes and buffalo cheese. It has been concentrating mostly on the American markets and has been acting as an export oriented food processing company and it enjoys a strong brand recognition overseas.

The company currently operates four production units, located at the foothills of the Himalayas which provides the company with the freshest of Air, blue underground water from the glaciers and the richest of soils. (Agaricus), Crimini (Italian Brown) and Portobello as frozen Buttons, Slices, Dices & de-stemmed Caps.

Mushrooms are grown in-house right from Composting agro waste and developing spawn to quick processing within hours of picking. Mushrooms - The company offers three varieties of Mushrooms.
White (Agaricus), Crimini (Italian Brown) and Portobello.

The plants of the company are located in Paonta Sahib (Sirmaur, Himachal Pradesh), Gujarat and Rajashthan.
Rajashthan plant will process Almonds, Berries, Cereal bars and high end confectionary and functional foods. The plant is manufacturing Vitamin and protein fortified “All” Natural” real fruits loaded Cereals, Diet energy bars and “Food on the GO” items which will be positioned as meal replacements or energy add-ons and will be targeted at the working population mainly youngsters.

The new plant set up in around 21 hactare land has most modern and state of the art production facility for growing mushrooms, of processing potatoes and other vegetables and processing of milk to produce mozzarella cheese sticks, paneer and frozen yogurt at North Gujarat and the installed capacity of the mushroom division is 60,000 tons of compost per annum which will produce 12,000 tons mushrooms per annum with a yield of 20% at 100% operating capacity.

The plant will produce 6000 MT Mozzarella Cheese per annum,9000 MT Yoghurt per annum, 27000 Tons Appetizers per annum and 27000 ton French fries per annum. The plant has setup the storage facility for 2000 Tons of frozen products.
Plant & Machinery has been imported from to produce specialty Buffalo Mozzarella Cheese with 15 million Lbs / annum capacity. All equipments are world-class, latest technology and are imported from USA, Denmark, Germany and Italy.

Himalya International is the first company to manufacture buffalo milk mozzarella cheese in india and Frozen Mushrooms, Vegetables and all ingredients are being marketed under ‘HimalyaFresh’ brand and Buffalo Mozzarella Cheese is being marketed under the brand ’ Artiginale Italiano’ ‘Growers gourmet’ the new brand has been registered for all Gourmet appetizers and hors d’ oeuvres.
India ‘the original home’ of water buffaloes with traditional Italian knowledge of making the real, authentic Mozzarella & Ricotta Cheeses under an Italian expert Raffaele Cioffi. Raffaele is the fifth generation cheese producer from the coast of Sorrento in Compania region of Italy in manufacturing Buffalo milk Italian Cheeses.

The company has a wholly owned subsidiary namely, Global Reliance, which takes care of all the shipment work of the company. It started importing food products from US department of agriculture and will market these products in India.

Contract farming

The company has created partnerships with local farmers Specialty Vegetables - The company process Vegetables & Baby potatoes grown especially in Sub-Himalayan terrain. Baby Potatoes are delicious & full of nutrition with tender skin. They also create Baby Potato skins for specialty, gourmet food service segment.

The Agriculture wing assists the farmers from planning the crops to providing quality seeds and Manure rich in organic Nitrogen.
And also supports in Field selection,Crop inspection,Hygiene,Water for irrigation,
Use of manure.

Quality Control / Audits / Certificates QA Team

The Company has established strict HACCP procedures for its products. The company places maximum emphasis on quality, from the choice of spawns, through each step to the finished product.

Himalya has a modern quality control laboratory manned by qualified and experienced food technologies and microbiologists. The Company has USFDA approval and the FCE registration for its canned mushrooms and a Kosher certificate for all its products.

Audits – SGS HACCP & GMP Audit
AIB International Audit
NSF Cooks & Thurber Audit

Certifications – HACCP & GMP certified Himalya International Limited is HACCP& FOOD SAFTEY, GMP & ISO 9000 certified company.

The company is audited by AIB International (US based), NSF Cook & Thurber (US based) & also by SGS.

The company works in close cooperation with CFTRI (Central Food Technological And Research Institute) located in Mysore, India.

It is also certified by the United States Department of Agriculture as a member of National Potato Promotion Board.

Laboratory Capabilities:

This testing includes Total Plate Count, E.Coli, Coliform, Staphylococcus, Yeast & Mold, Listeria & Salmonella. & In addition environmental sampling, Personal & Equipments Swabs, water testing are carried out.
a) Microbiological laboratory: Microbiological testing is carried out of all finished products.
b) Chemical Analysis: Milk & milk products testing, which includes Fat, Protein, SNF, Moisture, pH & all types of adulterations tests in milk. HPLC system (Perkins Elmer) for cow milk adulteration in buffalo milk & also glycoalkaloids testing in Potato.
Water testing includes Water hardness, Chlorination & Residual chlorine content & also testing of Packing material. These are factors that will impact the sector directly and the company in more of an indirect manner.

Product profile

The company has a well established profile of products ranging from processed food items to ethnic sweets. The company will initially start selling its existing products profile in the Indian markets which will be followed by newer product versions. The assurance of Quality and being “All Natural” – The company has so far been operating out of the Himalayan foot hills and hence has earned a reputation of delivering quality products. All of its products are closely connected to the idea of “All Natural”. The company clearly knows that this is one of the strongest differentiating factor and is trying to leverage it in the domestic markets. Almost all of their advertisements focus on the “All Natural” quality of the products.
Their portfolio of brands consists of – Himalya Fresh, The Finger Food factory, Bufalabella and Elevation 5000
• White (Agaricus), Crimini (Italian Brown) and Portobello
• Button Mushroom(32 mm)
• Mushroom Slice (5 mm)
• Mushroom Dice
• Baby Potato
• Scooped Potato
• Cheese Curds
• Onion Rings
• Sesame Mushroom
• Eggplant Slices
• Cheese Stuffed Jalapeno PeppersKajuKatli
• Almond
• Rasmalai
• Samosa
• Petha
• Milk Cake
• MotichoorLadoo
• DodaBurfi

Products and Plant Capacities :

Mushrooms 15000 Tons / Annum
Appetizers 24000 Tons / Annum
Dairy 15000 Tons / Annum
Ethnic Sweets 3000 Tons / Annum
Canned Foods 30000 Tons / Annum

Corporate History

MamMohan Malik and Sanjeev Kakkar in1986 jointly charted the future course of Himalya.

Corporate history.pdf (142.0 KB)

Growth Drivers

The cheese manufacturing units and increasing export opportunities. international inc in USA, which has made two joint ventures with US based companies – one covering east coast and the other the west.
Cheese manufacturing – The company has set up a 100% subsidiary – Himalya The east coast operations Bufflabella inc is located in Pennsylvania and the west coast operations are set up in California.

The JV partners are of Italian Lineage and are already processing and marketing mozzarella cheese. The parent company will export semi finished Mozzarella cheese which will be converted into final product and marketed by the JV in US. own cash and carry stores for distribution of ethnic foods manufactured from its plants in India. The company has also proposed to set up a logistics and distribution chain for this purpose.

The company has also signed agreements with grocery stores in US like ALDI to sell its products under Himalya fresh brand name. Under the agreements, the company will sell Himalya fresh products like frozen vegetables, baby potatoes and breaded appetizers.
The focus products will be Fresh Mushrooms, Vitamin D fortified, zero fat and full fat yogurts, Paneer, breaded appetizers, All natural ethnic sweets, frozen vegetables, packed soups, Olive oil, fruits, Italian cheese and nutraceuticals. The products will be available broadly under 4 brands – Himalya Fresh, Bufalabella, American Harvest and Uno Italiano.

The company has made tie ups with almost all major retail chains in India including Bharti Wal-Mart, Reliance Fresh, More, Metro, Home stores, Subka Bazaar.
130 crore processing plant in Gujarat will aid the company to expand and diversify its value added products line. The project will process “All Natural” Mushrooms, frozen vegetables, breaded appetizers, Yogurt and Mozzarella cheese.

The installed capacity of the mushroom division will be 9000 tones, 5940 MT per annum of Mozzarella cheese, 9000 MT per annum Yogurt and 15000 tons of appetizers. The project is 100% income tax free for the first 5 years from the year of production.

Rajashthan plant will process Almonds, Berries, Cereal bars and high end confectionary and functional foods. The plant will manufacture Vitamin and protein fortified “All” Natural” real fruits loaded Cereals, Diet energy bars and “Food on the GO” items which will be positioned as meal replacements or energy add-ons and will be targeted at the working population mainly youngsters.
The company has a formal agreement with a US company for technology transfer and product development suitable for Indian palette and climate. The state of the plant will import almonds and dried berries from US.

The company has contract farming for Oats in Rajasthan and Gujarat which will serve as the basic ingredient for healthy, high fiber cereals and Bars.

Turn Around

If you look at the last two quarters, Himalya is able to turn around and show profits.

Revenue split up

Geography Wise


1. After Joint venture Breakup with Simplot now they can sell all the products in India.

2.The Company also settled a case with Black Bear Wear house without opting for court trial. The settlement has me made for US $ 750,000.

3. To put all unproductive assets to use (frozen due to Joint venture with Simplot )and make all idle capacities productive in next 3 years.

4. Singapore High Court ruled in favour of Himalya Fresh and has rejected Simplot request for leave to Appeal in Supreme court of Singapore.

5. NH8 Land of the company midway between Delhi and Jaipur is planned to develop to align with GOI mission of Housing for all by 2022 under Prime Minister Awaas Yojna.

6. Spin off

Demerger of Appetizers and Snack food Ltd and Himalya Green Apartments Ltd

Post-demerger, Himalya International would be able to invest for the modernisation of existing units at Paonta Sahib and will focus on catering to the demand of regional north Indian markets and value added Indian sweets and snacks for exports.
Appetizers and Snacks Foods Ltd will become an export oriented company with focus on products like French fries and speciality potato products.
Himalya Green Apartments Ltd will focus on infrastructure/ real estate project for potential joint ventures or outright sale of housing


1Huge debt around 179 Crores

2.Constant expansion of units which led to huge debt.

3.The Joint venture with Simplot does not succeed.


Man Mohan Malik, the Founder, Chairman and CEO of Himalaya International was thrust into business at the age of twenty on the sudden demise of his Father. Six years of multiple debacles in diverse businesses, Textiles to Bullion, Commodities to stocks trading, did not decimate his will to succeed. With just a Penny in his pocket in 1979, he launched Himalya with green field project for Minerals & Chemical manufacturing.
Even though his education had previously revolved around Physics and Law, he quickly became a self-taught business leader in the small township of Paonta Sahib in the foothills of Himalaya India.

Sanjiv Kakkar, Co-Founder, President & COO is the man with incessant obsession to succeed. He is an Engineering grad from prestigious DMET, Calcutta India and Royal College UK. After 6 Years with multi-national shipping companies in Top responsible positions he joined hands with Man in 1986 and they jointly charted the future course of Himalya. Diversifying from Chemicals to food business in 1995, they set up a new composite project to grow Mushrooms & to process frozen vegetables and went on to contract farming baby potatoes and ventured in ‘Bufala Mozzarella Cheese’.


Other links*


Invested from 19 Rs to 24 Rs and contributes 20% of my Portfolio.


Very Nice detail report…Good work

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Thank you for sharing your research work. I took small position (basing on gut feeling after management comments in some interview). Your post helped me to get more idea on the company

Thanks Vipul and Stockduniya

Updates.pdf (584.4 KB)

This was the last updates in which Man Mohan Malik spoke about the future plans

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Mozzrella Market

India — the world’s largest producer of milk — is home to 70 percent of the world’s buffalo.

The total buffalo population in Italy is 300,000 buffaloes and India has 39 million.

National Dairy Research Institute found that India’s buffalo are the same variety as those that Italy.

Himalya International ties up Italian cheese expert Raffaele Cioffi and its the first company to manufacture Mozzrella in India.

Most of that quantity is exported to the U.S. as frozen curd, then stretched at a Pennsylvania-based plant operated by Malik’s joint venture partner. Shipping frozen curd from India is much cheaper than flying fresh mozzarella from Italy, and once the curds are thawed and stretched the resulting cheese is almost identical in quality.

Screener is showing nearly 27 percent of promoter holding is pledged…Isn’t it a big negative…

Its not just the promoter pledge thats the negative in this. The company was making good OPM till 2013 and after that it went for a toss from 24% to 10% levels now and so does the NPM turned negative.
Free cash flow is negative .
Receivable days is around 90 days avg
Top line sales fell from 189cr in 2013 to 120 cr even after capacity expansions

This company looks like a case of a turnaround at the first glance,but a more indepth study throws some questions which I could not answer(when I first looked at it 6months back) and hence passed:

  • Debt vs Promoter salary

While still having a debt of about 179 cr on books(best case-leaving liabilities aside),the promoters have been happily drawing salary to the tune of 1.2 cr.The point here is it could have been reduced if they were genuinely interested in reducing the expenses and turning it around.

  • Unwarranted luxury at the expense of company

The company has also been possessing a BMW for which it has been shelling out about 10 lakh a year for the past 3-4 years(definitely not contributing to the betterment of co. at least)

2016 AR shows the purchase of a Mahindra vehicle for about 44lakh for which the payment would start this FY onwards.The point here is to understand whether this actually to do with something which might help the company turnaround?Me thinks no.:

  • Low equity contribution
    More importantly,it is seen that when there is a serious matter of contributing equity in the company,it has been 3.84 cr only(it is the second lowest value compared to the bankers)

  • The passing off loans from related parties as Purchase is something which I could not understand or make sense.The figures in both the entries are almost matching:

There has been no action of the promoters,which helped me to answer the question that they are really turning around the company or have intention to do so.
I am really skeptical of the NH 8 land utilization thing,as many company are harping on the PM schemes to pass off the assets(lets wait and watch,how it plays out.).Even if it does,I am really not sure if it will trickle down to shareholders(not found a instance where they have been shareholder friendly)

  • Remaining points are covered above well so I will not add on to those.

As a conclusion,honestly I was looking for some initiatives which management is taking to really turn it around but I failed to find any.Looking at the above factors,I still feel the business will take significant amount of time to turn around if at all,given it is saddled with so much of debt.IMO the good things about food business(fried chips,mozarella) will only come to picture when company can reduce the debt.
I have passed hence,however people holding it can ride a ride harping on the turnaround theme :slight_smile:


Thanks for sharing indepth analysis. It reminds me again Buffet Rule 1 - Don’t loose capital Rule 2 Don’t Forget Rule 1.
When management integrity is in question, sometime greed to have multi bagger result in BEGGAR !


Hi Vivek,

This is due to the termination of JV with Simplot. After the termination Simplot files arbitration proceedings in Singapore court.

The expected sales did not happen with the JV with Simplot. And also all the units tied up with exclusive clause with Simplot. So they couldn’t market their products in India.

After the termination of JV with Simplot and successful winning of court case in Singapore, they have now taken over the all the units.

From 2015 Annual report

From 2016 Annual Report

Raising of Foreign funding from Overseas to reduce debt.

From 2016 Annual report

Hi Tarun

  1. The high Salary drawn by the promoters is negative

  2. Reducing the debt - they are looking to raise from Overseas to reduce debt on LIBOR linked rates.

  3. The BMW loans was availed while the company was going well during the year 2013. The Mahindra Vehicle finance could be for commercial purposes.(Not sure)

4.They have invested 4.66 crore during the year 2015 also.

5.These related party transaction might be advances for the procurements of Goods.(Need Verification).

6.If you look at the corporate history and growth of the company, they have started the company from the scratch and grown into major exporter in Food Products. Due to the failure of the Joint Venture with Simplot they have incurred these losses.

During the initial days they have struggled a lot while exporting of Mushrooms, the first batch of the exports was rejected due to inadequate temperature control. At that time there was no domestic market for the Mushroom.

Himalya is the first company to introduce and export of PortoBello Mushrooms and also the first company to export Mozzrella cheese from India. First time in India it introduced Fruit based blended Yoghurt.

It will take time for the company to bring up all the units to production.

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Shareholding for the Period Ended December 31, 2016
Himalya International Ltd has submitted to BSE the Shareholding Pattern for the Period Ended December 31, 2016.

Promoters pledging reduced to 13.2 crore


Himalya International Limited - Demerged Company

Appetizers and Snack Foods Limited - Resulting 1 Company

Himalya Green Apartments - Resulting 2 Company

Himalya International Limited - Demerged Company

The Demerged company willy only retain the production and domestic sales of Mushrooms and retain domestic and export sale of packages sweets, Indian snacks and meal products, from its plant at paonta sahib, Himachal Pradesh.

Appetizers and Snack Foods Limited - Resulting 1 Company

The Resulting 1 Company will become export oriented company focusing on French Fries, Speciality Potato Products, Western Style Appetizers, Cheese and Canned Soups & Curries and may attract large overseas players.

Himalya Green Apartments - Resulting 2 Company

For undertaking the business of Real estate, Infrastructure and construction residential houses.

Demerger ratio

Himalya International Limited - Demerged Company

Reduction of Share Capital

The Shareholder of demerged Company shall continue hold 6 equity shares of face value of Rs10 of the Demerged Company as fully paidup equity shares against 25 equity shares of face value of Rs 10.

25 Equity Shares ==> 6 Equity Shares

Appetizers and Snack Foods Limited - Resulting 1 Company

For every 25 equity shares of face value of Rs10 each held in the Demerged Company as on the Record date, the equity holders of the Demerged company shall be issued 17 equity shares of face value of Rs 10.

25 Equity Shares ==> 17 Equity Shares

Himalya Green Apartments - Resulting 2 Company

For every 25 equity shares of face value of Rs10 each held in the Demerged Company as on the Record date, the equity holders of the Demerged company shall be issued 2 equity shares of face value of Rs 10.

25 Equity Shares ==> 2 Equity Shares

Reason for Hive off

The Company has imported 9.5 Ton per hour line to manufacture French fries, yet to be setup under EOU Scheme. Its is among the first indian companies to setup 100% EOU for frozen mushrooms, vegetables , fruits,Speciality Potato Products, Western Style Appetizers, Cheese and Canned Soups & Curries.
The Assets can be hived off as a separate company to export demand of products. Further the unit is close to Mundra Port. Eports from Himachal unit is becoming expensive due to high inland costs of refrigerated containers to port.


2014 - Interview with Sanjay Kakkar, Himalya International.

In this article he has mentioned, how they have tried for 6 years to get Costco order.



Himalya selling its products in Four different categories.

  1. Industrial.
  2. Food Service.
  3. Private Label.
  4. Ethnic Food.



Hi Arun @apavel,

Let me at the outset congratulate and thank you for the detailed write up on this seemingly potential turnaround story which prima-facie looks interesting…

As a starter, I’ve few questions/concerns which you may please help me decipher…

  1. What’s this story about JV with Simplot? With what objectives HIL went for this JV with Simplot? why it failed and with such bitterness? What’s the status as of now?

  2. What’s this case with Black Bear Warehouse? HIL paid or received this settlement money?

  3. As per latest SHP, promoters holding has gone up to 46.62% from 41.63%. Have promoters bought this publicly from open Market? A quick search reveals this…

I think, Sanjiv Kakkar is one of the promoters right? Here above it says he doesn’t belong to promoter group.

While here below it says he belongs to promoter group.

  1. As per this CA, Sanjiv Kakkar and other three directors have resigned. What do you read into this?

With reference to the earlier letter dated October 01, 2016 informing about Outcome of Board Meeting held on October 01, 2016, Himalya International Ltd has further informed BSE that the board had also considered and the resignation of the following directors on personal ground.

1. Mr. Sanjiv Kakkar
2. Mrs. Anita kakkar
3. Mr. Keshav Sharma
4. Col. Praveen Kumar Mehta

The Board deliberated their request and accepted their resignation dated September 20, 2016 with immediate effect

While you may please help me decipher this, I’ll try to dig deeper into the story.

Disc: No Position

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Hi Coolaksh,


1.Reason for Joint Venture:

The reason behind the JV with JR Simplot is to market Himalya products in India and South East Asia. And it aims at sales of $50 million in India and South East Asia markets within the next three years. Besides marketing, JR Simplot will provide technological expertise in potato farming and in production of french fries.

Reason for Split:

Both companies initially invested $5 million in the enterprise, anticipating that the enterprise would be generating $50 million by 2014.
The sales goal has not been achieved, “and the exclusivity clause in the joint venture meant the Indian partner (Himalya) could not independently sell the products which affected the business – especially the frozen appetizers unit.”
In 2014, Himalya has been looking to dissolve its relationship with Simplot for more than a year in order to re-launch its products at retail chain stores and market them to the growing foodservice segment in India.

2.Himalya received the settlement amount of 750,000 dollars from Black Bear Warehouse.

The delay in recovery from insurance company is due to investigation by US Federal agencies. The claim has be dragged and bagged down by Warehouse layers on the several pretexts of third party claims. The third party claims include their vendors and vendors insurance companies and faulty solar panels and other equipment supplied to the warehouse. Besides, warehouse insurance cover is not sufficient to cover the damages of all the stocks totally gutted in the fire.

3.Yes its off market transaction, Sanjiv is also from Promoter group, but if you look at the complete statements for the previous year, that column was not filled in.

4.The directors resigned due to less number of independent directors.

Board Meeting on Jan 28, 2017

Himalya International Ltd has informed BSE that the Board of Directors meeting will be held on January 28, 2017, inter alia, to consider the followings:

1. To consider un-audited results for the quarter ended December 31, 2016.

2. To Appoint Secretarial Auditor of the Company for the F.Y 2016-17.

3. To consider progress and further steps to be taken for the assets reconstruction plan under the company “Scheme of Demerger”.

4. To review the pending export orders and further development of products for exports as per customer requirements.

5. To consider revival of marketing of all products within the country and discuss the strategy to revive Himalya Fresh brand for all Company’s products.