Author Archives: jbvachhaadmin

Capex revival

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Indian crude steel production seems to be on course to finally cross the 100 million tonne mark this fiscal year

The rapidly shrinking excess capacity is also one reason why there has been a bidding war for insolvent steel firms such as Bhushan Steel and Essar Steel. Photo: Bloomberg

Indian crude steel production seems to be on course to finally cross the 100 million tonne mark this fiscal year. It now seems likely that the steel industry will hit capacity constraints unless new investment plans are finalized soon. There are also early signs of a pick-up in capex in the steel industry. The rapidly shrinking excess capacity is also one reason why there has been a bidding war for insolvent steel firms such as Bhushan Steel and Essar Steel.

All this matters in a macro sense as well. Most economists agree that India cannot have a sustainable growth recovery unless private sector investment activity picks up. The strong growth in consumer spending—backed by a surge in household debt—will also ensure that more capacity will soon have to be created in the automobiles supply chain. There are already early signs of this as well. It seems that industrial capex is beginning to bounce back—though it is for now being led by brownfield capex to increase the capacity at existing factories rather than greenfield investments to build new factories. That will come later.

Global steel industry poised for stable growth in 2018

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Last week, we reviewed the commodity prices as they are likely to behave in FY19. The available indications suggest a gradual downward trend in global prices of iron ore, coking coal and scrap from the current level.

The implication for the global steel trade arising out of US actions on steel imports under Section 232 of US Trade Expansion Act, 1962 may not be significant as the US has initiated exclusion action with a number of major trading partners.

Last week, we reviewed the commodity prices as they are likely to behave in FY19. The available indications suggest a gradual downward trend in global prices of iron ore, coking coal and scrap from the current level. This sounds good for the steel industry which sees uplift on the demand front. The short range outlook of WSA forecasts 1.8% growth in global steel consumption in 2018, led by India (5.5%), the US (2.7%), the EU (2.5%), Turkey (5%), Russia (2.1%) and South Korea (1%). China is also likely to consume similar volume of steel as in 2017.

Meanwhile, the World Economic Outlook recently brought out by IMF has predicted a reasonably good growth in global GDP of 3.9% and this would be fuelled by GDP growth of 7.4% in India, 6.6% in China, 2.4% in the EU and 2.9% in the US. Japan, a major steel producer is also likely to experience a GDP growth of 1.2% in the current year. Thus, higher global economic growth which would also require an investment growth of 11% over last year to take the share of investment as a percentage of global GDP to 26% as per IMF estimates would generate substantial steel demand in varying proportions in different countries depending on the primary focus of Fixed Asset Investment as a percentage of GDP.

The vulnerability of these positive outlook, however, hinges crucially on what is going to happen in China that not only controls nearly 50% of global steel production, but is also a major exporter (achieved 16% of global exports in 2017) of steel, dominates the iron ore prices (imported 1,075 MT of iron ore in 2017 and would gradually close down the high priced domestic iron ore concentrate producing units). It has also a major influence on global coking coal and coke prices.

As excess steel capacity was found to be the single phenomenon damaging the interests of the global steel producers during 2014-17 in terms of lowering the prices and thereby the profitability of the industry, China, having accounted for nearly 50% of the estimated surplus steel capacity, had to assure the outside world that its commitment to bring down the carbon footprint would entail elimination of some of the polluting units in steel, coal and cement. It had set a target of closing down 150 MT steel capacity during 2016-20. The record so far is good and it is likely that China would overshoot the target by 2020.

For instance, recently the city of Handan in Hebei province has announced closure of steel making capacity. This is in addition to the closure of steel capacity in the city of Tangshan. In totality, Hebei province has planned to close down steel capacity of 10 MT each in 2018 and 2019 and 20MT in 2020. Earlier, China announced closure of around 50 MT of induction furnace capacity whose pollution record was much below the norm. It is interesting to note that under the compulsion of restructuring the Chinese economy from investment-led to consumption-led promoting thereby the development of light engineering and high value producing units, China has also started 10 new wide HSM capacities in the past 18 months along with new capacities in CRGO and other special steel categories which are not indigenously available. This pragmatic policy would benefit the Chinese steel industry to face the odd challenges of fluctuating global prices, if any, in the long run.

The implication for the global steel trade arising out of US actions on steel imports under Section 232 of US Trade Expansion Act, 1962 may not be significant as the US has initiated exclusion action with a number of major trading partners. For China, however, the protectionist move by the US may extend to products other than steel and may include Chinese engineering exports. As the US is keen to improve the productivity of its manufacturing sector for job consideration and creating earning opportunities, it may restrict imports of manufactured products from China. The resultant slowdown in Chinese indirect steel exports would imply that indigenous demand for steel in China must grow by a larger extent to compensate the loss of steel market for making exportable engineering items to the US. The inability of the Chinese domestic market to grow to make up the shortfall may prompt China to enhance steel exports and this action may depress the global prices of HRC and other flat products.

Thus, apart from these few unpredictable events, the global market for steel in 2018 is poised for a stable growth for steel industry in terms of a reasonable margin and profitability for the industry sufficient to attract more investment for creation of fresh capacities in the product range where indigenous availability remains a constraint to cater to the emerging requirements of the critical sectors in the economy. This is a most likely scenario for India in FY19 which may take an interesting turn in the second half by the actions of the successful bidders for NCLT referred cases of Essar Steel, Bhushan Steel, Electrosteel Steels and Monnet Ispat.

EU countries looking at India’s GST closely to implement in their counties: PwC’s Jo Bello

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The success of the online Goods and Services Tax (GST) in India could spawn similar experiments with the uniform producer levy in the common European trading bloc, PwC’s global indirect tax leader Jo Bello told ET.

“What India has achieved on the technology part of GST is pretty amazing. Many EU countries are watching India to see whether it works for you and whether they could do it too,” said Bello.

She said that GST has started changing India’s perception not just for policy makers in other countries but also for global investors. While India’s GST implementation has come under a lot of criticism from many in the domestic industry, Bello said the indirect tax reform has in fact attracted many global investors who until now were steering clear of India.

Also with GST, India may have moved the value chain and the tax system is almost on a par with countries that have good indirect tax structures, including those in China.

“There are lots of similarities between the Chinese system and the Indian system. But the Indian system is now extremely similar to the rest of the world’s VAT (Value Added Tax) systems,” said Bello.

“India has e implemented GST and it is starting to change the country in exactly the ways they were intended to. And so I think actually India has got an awful lot to be proud of in how it has achieved its ambitions,” she said.

India moved to GST last year on July 1, where all the indirect taxes like sales tax and VAT were subsumed into a single producer tax. This did create initial problems, triggering litigations. In most cases, the government has come out with clarifications. But harnessing full benefits of the biggest tax reform since independence could be delayed if the complexities faced by the industry keep increasing.

“So there are still complexities from a technology perspective or reporting perspective… and (it would) be really interesting when everything settles down. I hope for India’s sake that it’s relatively soon,” she said.

Industry experts believe that New Delhi may also use GST data to track those who might be escaping the income-tax net.

 

Sale of ‘going concern’ exempt from GST: AAR

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Sale of a going concern by a business house will not attract Goods and Services Tax (GST), as per an order by the Authority for Advance Ruling (AAR).

The Karnataka bench of the AAR gave its ruling based on an application filed by Rajashri Foods Pvt Ltd which wanted to sell one of its units along with fixed and current assets as well as liabilities, including bank loans, for a lump sum consideration.

The AAR said that as per a government notification, any transfer of a going concern constitutes a ‘supply of service’ and ‘nil’ tax rate will apply on it.
A going concern is a concept of accounting and applies to the business of the company as a whole. Transfer of a going concern means transfer of a running business which is capable of being carried on by the purchaser as an independent business.

EY India Partner Abhishek Jain said: “The ruling should aid in offering clarity to GST implications on conventional hiving off/demerger transactions”.

AMRG & Associates Partner Rajat Mohan said, “This ruling categorising the transaction of transfer of running business as a supply of service would be a nightmare for corporate’s undertaking mergers and acquisitions, as it would entice higher compliance on account of GST and would also force amalgamating company for proportionate reversal of common input tax credits.”

Is the world simpler than it was before GST? This jury is in

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The World Bank’s March 2018 version of ‘ India Development Update’ has some critical remarks on the goods and services tax (GST). But it isn’t as harsh as headlines have made it out to be.

The headlines have largely been driven by the following, “Comparing the design of India’s GST system with those prevailing internationally, we note that the tax rates in the Indian GST system are among the highest in the world. The highest GST rate in India, while only applying to a subset of goods and services traded, is 28%, which is the second highest among a sample of 115 countries which have a GST (VAT) system and for which data is available.”

This criticism is linked to the second criticism. “Next, we assess how the number of different GST rates prevalent in the Indian system, and thus its complexity, compares internationally. The Indian GST system currently has 4 non-zero GST rates (5, 12, 18, and 28%)…. Most countries around the world have a single rate of GST: 49 countries use a single rate, 28 use two rates, and only 5 countries including India use four rates. The countries that use four or more rates of GST include Italy, Luxembourg, Pakistan and Ghana. Thus, India has among the highest number of different GST rates in the world.”

It’s extremely unlikely that India will ever have a single rate, since equity considerations override those about efficiency. We are probably headed towards three rates, with 28% declining, but 5% also increasing. One can’t have one without the other.

Since we are in a process of transition and haven’t yet reached the terminal goal, the criticisms are valid. But so is the point about incremental improvements, something that the GST Council has been attempting. While I can understand these criticisms — or those about some items and the entire chain (a function of the threshold) not being part of GST, or those about hardware, software and systemic constraints — I cannot understand how GST has made everything more complex, a criticism often levied

It may have made life more complicated for those who were outside the indirect tax system and didn’t pay taxes. But how has it made it more difficult for those who were part of the tax chain?

Legislative Outback

Resistance to change is universal. Transition to GST is always difficult. Witness Australia’s A New Tax System (Goods and Services Tax) Act of 1999 (operational from 2000). Witness the debate about exclusion of basic food items, or the dispute between the federal government and the state government of New South Wales there.

Specifically, I am a great admirer of Section 165.55 of Australia’s 1999 GST legislation, although it is not easy to fathom what it means. “For the purposes of making a declaration under this subdivision, the commissioner may: (a) treat a particular event that actually happened as not having happened; and (b) treat a particular event that did not actually happen as having happened and, if appropriate, treat the event as (i) having happened at a particular time; and (ii) having involved particular action by a particular entity; and (c) treat a particular event that actually happened as: (i) having happened at a time different from the time it actually happened; or (ii) having involved particular action by a particular entity (whether or not the event actually involved any action by that entity).”

In an ideal world, there would be no tax lawyers, no chartered accountants and no legalese. As William Shakespeare said in Henry VI, Part 2, “The first thing we do, let’s kill all the lawyers.” Actually, Shakespeare said nothing of the kind. He made Dick the Butcher say this. And we still don’t know what Shakespeare intended — cracking a joke about Dick, or cracking a joke about lawyers.
In a less-than-perfect world, there will be tax lawyers, chartered accounts and legalese, the last necessary step to reduce litigation. GST, in Australia or in India, doesn’t make the world perfect. Is the world simpler than it was before GST? That is the question.

I can’t leave you itching to know what the mysterious Section 165.55 is about. An entity is a legal entity: individual, body corporate, partnership trust, etc. Schemes give entities GST benefits. All Section 165.55 means is that a commissioner making a declaration can disregard a scheme.

A scheme is linked to an event that happens at a specific time and to an action taken by the entity. Since the commissioner has the right to disregard a scheme, he disregards the event (which leads to the scheme). Therefore, an event that has actually happened is treated as not having happened and vice versa.

The Great Barrier Brief

I guess the time and the action bit are also obvious now. But this still begs the question. There is a Plain English movement that is not unknown in Australia. Couldn’t the language of 165.55 have been simplified to make it comprehensible to the non-lawyer? It should have been possible. It isn’t gibberish, nor is it gobbledygook.

I suppose the desire to avoid litigation overrode the desire for simplification. But if we accept this logic, that rationale is also equally applicable in India. I haven’t yet found the counterpart of 165.55.

Best 5 Business Opportunity for Chartered Accountants in India

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After the completion of Chartered Accountant course, the aspirants can become either employed in a firm as an employee or can start their own private practice. If you want to start-up your own business, then firstly you need to learn about the important terms and conditions of Business. Before getting started, the first thing that you should keep in your mind named Hard Working and Patience. These are two important factors of business that will bring you to the new height of success. There are various business opportunities in the country that a Chartered Accountant can start without investing huge money. The Chartered Accountant played an important role in the various departments of the organizations such as auditing, assurance, tax consultancy, accounting services, accountants, finance outsourcing and financial reporting. Here, we describe best five business start-up strategy:

  • You can take a franchise of Taxation Software Company
  • Tax Consultancy Services
  • Audit Expertise Services
  • Outsourcing Services
  • Open an Academic for Chartered Accountancy Course

1. You can take a franchise of Taxation Software Company

You can become a dealer by taking a franchise of Taxation Software. You can earn money by selling the taxation software on your behalf as you can create your own sources of income with an unlimited potential. Thus, taking a franchise of Taxation Software is easier and less expensive. Each passing day, the number of taxation software is increasing day by day in the country as there are a number of organizations who are using taxation software for online e-filing.

2. Tax Consultancy Services

Every business today needs an adviser to guide them to track their income and expenses. If you are an expert in tax law, planning and compliance then you can start your own business of taxation services, through which, you can maximize your value by providing Tax Advice to a person or organization. Starting Tax consulting will enable you to meet the global requirement of the clients, which gives you the flexibility and security you deserve. The Tax Adviser can also offer more valuable services to their clients. Tax Consultant, it is a small business that you can easily start.

3. Audit Expertise Services

If you are an expert in accounting and auditing matters, then Auditing Expertise would be a good option to start-up it on your own way. Thus, the audit services allow you to make well-informed business decisions, to better assess the opportunities and risks your business might face, and to boost your company’s credibility with lenders, investors and clients.

4. Outsourcing Services

A chartered accountant can also start up a business of outsourcing and recruit those students who have completed their article-ship and waiting for their final exams. With this, you can manage various conditions of accounting, taxation, legal, compliance, research, financial data management, documentation, ERP implementation, etc.

5. Open an Academic for Chartered Accountancy Course 

The academic is a good option to make your business sprout. Each passing day, the Institute of CA and CPT course are increasing rapidly in the country. The top-notch faculties and positive outcomes will help the institute to grow up in a better manner.

 

Mumbai dotes on its Theobroma. Now, it’s time to fall in love with its owner!

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With the Gateway of India and the Taj gallantly guarding its left, the shopping passageway with typically Indian trinkets piercing through its centre, and Mumbai’s most iconic vintage brands adorning its right, Colaba Causeway is one of those places in Mumbai that invoke the most profoundly fervid feeling of nostalgia. And when there cropped up a charming little cafe and desserts place at the end of the street in 2003, most of us instantly knew that it shall fit right into that reminiscence-heavy frame, and stand the test of time to become as iconic as its neighbours. Twelve years since,Theobroma became a city-wide chain and a household name. Considering this irreplaceable role that Theobroma has played in every Mumbaikar’s culinary exploits, I am sure one is anxious to meet the one who gave us mortals the ‘food for gods’. Without any further ado, meet one of our generation’s most talented pastry chefs – Kainaz Messman.

Kainaz’s lifetime has been about finding the joie de vivre through a happy tummy. Born into a merrily gourmand household, the family’s ties with serving up edible glee go way back. “I grew up in a sweet-smelling house. My family is obsessed with food. Our lives revolve around what we make and what we eat. My passion for baking has been my lifetime in the making,” she fondly recollects.

Her mother would supply cakes and desserts from home, and they were everyone’s absolute darling. “Theobroma is still an extension of that home business,” maintains Kainaz. But between that catering business and it turning into a commercial bestseller, was a series of assortments.

She was determined to pursue law academically, until a summer in France led her to her true-calling. “At the age of 16, I went to France as a Rotary Youth Exchange Student. That year changed my life and career. I fell in love with simple, classic, unpretentious patisserie. Upon my return I proceeded to study French literature, but I already knew I was going to become a chef.”

She procured a formal education in the field from IHM Mumbai, and then went on to OCLD Delhi. A strikingly passionate young woman, she was snatched up immediately by the Oberoi Udailvilas at Udaipur, where she had a rather delicious stint. Her plate was filled with success and progress, until a back injury abruptly threatened to end her career. The doctors broke it to her that being a chef would be implausible, as standing up for long hours and indulging in rigorous work could cause permanent damage. Adamant to create another way after the most convenient one had caved in, Kainaz had already started nurturing a new dream; of starting her own cake shop someday.

Her grit made sure that the day wasn’t far. In 2003, Kainaz boldly decided to start up, albeit with next to no experience to handle the business end of a culinary enterprise.

“I knew how to bake cakes, but not much else. I went from having the responsibility of making one product in a comfortable five star environment to being responsible for everything and totally unprepared for the retail market, the demands, and challenges that lay ahead. Whatever went wrong and whoever’s fault it was, I had to learn that the buck stopped at me, I had to set it right. Running your own business in India can be a minefield of permissions, approvals, bribes, and bureaucracy.”

And indeed, Kainaz had to navigate through the warped side of the spectrum to get what she wanted. “F&B is a male-dominated industry, in India and around the world. Women are in the minority for many reasons. The jobs are physically demanding, hours are unsociable, role models are few. The outside world – government agents, landlords, suppliers, employee candidates –is also disproportionately male. The obstacles are many but largely they are cultural.”

But not even systemic forces managed to provide a strong enough resistance to her spirit. The connoisseur, who initially started out intending to just give you your neighbourhood corner cafe, welcomed the risks with open arms. And today, she can proudly say that “no matter where you are in this vast city, you won’t have to travel too far to catch my signature brownies freshly out of the oven.” She does so with no less than nine wildly popular outlets across the map of Mumbai, each flawlessly retaining the fundamental ability of their love-laced desserts of deluding you into thinking life is bloomin’ awesome!

“When we started, we did not know what to expect. We didn’t even know if we would recover the costs of starting our business or whether we would be able to fill the four small tables we had ordered. We were making the things we liked to eat, we hoped to do well but we could not have ever predicted or dared to hope for the success that Theobroma would become. We have received so much love and warmth and blessings and encouragement that we are humbled and grateful in equal measure,” says Kainaz.

Considering that Kainaz ran an eatery with largely world-cuisine inspired dishes, her success and her brand’s popularity also pointed toward a maturity in our food – fare and culinary sense. “Mumbai has gastronomically evolved over a decade. The customer today is far more knowledgeable, better traveled, has a more developed palette, and is willing to experiment with new products and flavours. People routinely eat chocolate cake for breakfast or have a trio of desserts for dinner. I love that I have been able to be part of this evolution!”

Having been dealt such a serendipitous hand, Kainaz has never once moved her eyes from the goal. Spoiler alert – the icy grip of winter on the north would feel more warm and fuzzy in the years to come, as the best hot chocolate might be coming to your town! “We are in expansion mode. We have nine outlets open and a few in the pipeline. And Delhi is in our sights. It is our biggest market after Mumbai, we courier our products to the Capital all the time. We would love to be there but need to work out how to finance the growth, manage the operation, and maintain quality. I do not have a time frame to offer at this stage, but we are working on it,” she reveals, and I can already feel 10 million northerners hold their breaths.

And Kainaz isn’t all that different from that signature spicy hot chocolate. She serves you sinfully delicious dessert with a smile that makes your day at your favourite corner cafe, but at the same time, stands tall as a remarkable example for everything women can be, in this steadfastly changing food and beverage space.

“Riyaaz Amlani, the President of the National Restaurant Association of India (NRAI), has predicted a rise in the number of female chef owners opening restaurants in the larger cities throughout India. And I find this forecast to be absolutely palatable. The number of female chefs is set to grow.  Women chefs have been under-represented, but the balance is slowly reversing,” she concludes confidently.

 

This man is trying to deliver organic products to customers on a budget

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In his crusade to encourage organic products, Chennai-based Abdul Shukoor is bridging the gap between organic farmers and customers.

In recent years, we have seen a growing demand for organic products across households in the country. There is no doubt that the organic industry is making its way into the lifestyles of many, but expensive products are a concern. In Chennai, one man is trying to eliminate this concern by delivering fresh, affordable, and organic produce straight from the farmers to the households

Abdul Shukoor (34) is happy to have left his high-paying job in the telecom industry about two-years-ago to start making a difference. Stumbling upon a farmers’ market where he saw them selling organic products (vegetables, lentils, oils etc), Abdul was prompted to an idea that would benefit both organic lovers and farmers.

“After leaving my full-time job, I wanted to start something on my own. I sold A2 milk with a friend for about two years, and then I happened to chance upon the farmers’ market, where they were selling organic products. I felt like promoting this in more public places,” Abdul says.

Abdul then decided to procure, pack, and deliver organic products on a small scale to his small but potential customer base. To do this, he associated himself with a small association of organic farmers in Erode called Uyir. It has been a year since Abdul began his journey with the association, and he feels a lot is yet to be done.

“People love organic products and there is a growing demand for it because everyone is realising the ill-effects of chemicals used in farming. Uyir in Tamil means ‘life,’ and this small community of farmers are known for producing genuine organic products. With the culture of home delivery enticing more customers, I decided to start this venture on a small scale. Currently, I have 20-25 customers,” Abdul says

Owing to small customer base, Abdul is restricted to sell organic grocerieslike lentils, cold press oils, and rice along with salt, millets, sugar, jaggery and honey. To avoid wastage of vegetables which he would have to procure in bulk, Abdul is waiting for his customer base to increase, so that he can help the farmers by selling their vegetable produce as well.

Selling his products in public spaces, word-of-mouth marketing, and keeping constant touch with his existing customers has earned their trust in Abdul’s venture.

“The products I procure now are need-based. Customers give me a week’s notice on the products they require, so I buy the exact amount from the farmers. This way I can also ensure the quality of the product I am delivering to the customer. For the farmers, it’s a big deal that their products are sold in the city. I also courier these products across India with minimal shipping charges, based on the distance,” he adds.

Huge profits not important

Abdul realised one of the main reason for consumers to refrain from buying organic products was the cost. He felt the brunt of this when he approached several commercial spaces to sell his products.

“It is great that there are so many stores selling organic products, but they are too commercial. I sell my products by adding a margin of 15-18 percent, but the market adds more than 30 percent margin on the actual cost of products. My venture will make no sense if I added the same margin to my products. The idea is to provide quality products at affordable rates to consumers, so they can keep coming back,” Abdul says

The challenge

Leaving a well-paying job was not the only challenging decision Abdul had to make before setting up YSA Farms. Everyday is a challenge for Abdul who is now struggling to expand his venture with not much support. A one man army trying to do good to farmers as well as his customers, Abdul faces disappointment on a daily basis when he tries to encourage people at home to switch to organic products.

“Charity begins at home, but no one in my family is encouraged to take up farming or even switch to organic products. They tell me that I should rather sell my car, go abroad and work there so that I can earn more money. But that is not what I want to do. I think of this as God’s work, and a little relentless hard work from my end has helped reach at least an entry level in this sector.

Future plans

While Abdul is optimistic about his venture scaling up, he has set his mind on YSA Farms. He aims to set up his own spinach farm, and has been doing extensive research in the area of organic spinach farming. Currently in talks with land owners across Tamil Nadu, Abdul believes he can soon give many farmers an opportunity to grow spinach and other vegetables in these farms.

“I want to take this to farmers beyond Uyir. There are farmers in Pondicherry, Ooty and other places who can benefit from this system. For this I need to be able to buy more. I chose Uyir because they are very cost-effective compared to the rest of Tamil Nadu. But there are many farmers who have heard about what I am doing and want me to buy from them as well. I can’t do that now, but hopefully soon enough,” Abdul says.

Abdul Shukoor can be contacted on [email protected]

 

 

 

Coding for natural ice creams

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Work projects took him to Italy and from then on, Ajay re-coded his life

Ajay Mesargi says he was at the right place at the right time and that’s why his career is where it is now. Ten years ago, his maiden tryst with gelato in Milan transformed his outlook. So much so that when he expressed his desire to switch careers, his wife thought he was out of his mind. After all, how many software engineers give up their career to make ice creams? Eventually, Ajay could convince his wife and now, he is a professional ice cream maker who designs signature ice cream flavours for his clients. A sort of flavour maker of ice creams. It won’t be wrong to call him a flavour consultant.

His USP: he makes ice creams with natural products, though he was not trained for the F&B industry. .

Ajay was a coder in the US during the software boom. “I was a simple cobalt programmer. My first project was with Honda, a 16 billion dollar Y2K project. The company was strict and notorious for sacking people. Every Monday morning we would come to see which seat is empty. On one such Monday, I saw manager, worried walking up and down. Upon enquiring, he told me the program coordinator for the Y2K program had quit abruptly and that they hadn’t found a replacement yet,” recollects Ajay.

Taking a final look at the munjal ice cream he is making at Indulge, Ajay recalls, “I told my manager that I had observed my colleague’s work and could handle it temporarily until they a replacement. They agreed. Within five days my manager handed me the entire project which consisted of eight teams. Incidentally, I came to know that I was the project manager at the time when our project was over and my manager was leaving to California.” Ajay moved to California, became a certified Project Management Person and returned to India after handling his last project with IBM.

At that time, he was also in charge of another project in Milan. Which is when he met gelato and fell in love with it instantly. “I tried vanilla and I was blown away. I never knew vanilla could be so delicious. So every week, I started trying new gelato places and feeling alive with every scoop. I wasn’t just enjoying my gelatos, I was also getting to learn about it and understand the science behind it. I also expressed my desire to take gelato to India to my manager,” recollects Ajay.

While Ajay was in Milan enjoying work and gelato, his manager came to Bangalore (now Bengaluru) to oversee India operations. She went to the first gelato store that had opened in Bangalore and pinged him, ‘Do it. I just tasted the worst Sundae at this gelato store in Bangalore,’ says an elated Ajay.

Determined to take his idea forward, Ajay came back to India and set up his gelato store in Mysore (now Mysuru), importing machines from Italy. “My raw materials are my magic potions. I use only natural products like fruits, stevia instead of sugar. In my ice creams one can taste the fruit or the nut from whatever the ice cream is made of,” assures Ajay.

Ajay is an expert in making ice creams, gelatos and sorbets with musk melon, cucumber, kiwi, chickoo, Indian berries, lemon, and more.

This column features people who dared to give up lucrative career to pursue their dream.

Eventually Ajay could convince his wife and now, he is a professional ice cream maker who designs signature ice cream flavours for his clients. A sort of flavour maker of ice creams. It won’t be wrong to call him a flavour consultant.

With ready to use fried onions, this startup saves you time and tears in the kitchen

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Everyday Gourmet Kitchen Foods Pvt Ltd offers fresh fried onions to commercial and residential kitchens, thereby taking away the pain of peeling, chopping, and frying onions.

At a glance

Startup: Everyday Gourmet Kitchen Foods Pvt Ltd

Founders: Satyajit Roy

Year it was founded: 2014

Where it is based: Mumbai

Sector: Food

Problem it solves: Offers ready-to-use fried onions

Funding raised: Bootstrapped

While some among us enjoy the laborious process of basting, baking and blanching to come up with a Michelin-grade plate of food for our loved ones, lesser mortals do appreciate any help to fix things quickly and easily.

Satyajit Roy’s family belonged to the former group. Coming from a Bengali family, mutton biryani was a weekly affair in his household. However, the indulgence came with a lot of tasks.

“One Sunday I left my house at 9 am to run an errand and returned around noon to see my poor mother, who had been chopping away for three hours, in a puddle of onion tears. I pointed out to my mother that a better use of her time would be to buy this product from the market directly, to which she replied that no such product was available in any of the shops that she went to,” recalls Satyajit.

A quick Google search revealed that no such product was available in the domestic markets, but it did exist abroad. At that point, he was struck by the thought that this may be a great solution for the domestic Indian market.

That was the beginning of Everyday Gourmet Kitchen in 2014. Under its flagship product, it offers fresh fried onions to commercial and residential kitchens, thereby taking away the pain of peeling, chopping and frying onions.

Multiple use cases

Multiple use cases

Satyajit says, “There is a 25 percent wastage of all onions that are grown in India. The reason being the farmers don’t get a fair price for the produce due to volatility of the markets and improper storage conditions. Since there is an abundance of produce we intend to make a dent in the wastage figure, which stands at approximately five million tonnes yearly.”

Traditionally, fried onions are used in the making and garnishing of biryanis of all types. This is one of the primary uses for EGK Fresh Fried Onions.

EGK’s fried onions are also used in multiple ways and across cuisines.

“For the Indian markets we find EGK onions are used as a great way to save time when making gravies,” explains Satyajit.

They are also consumed as a snack.

Currently, most of its revenues come from the B2B segment, where it sells large volumes to restaurants, caterers, flight and railway kitchens, just to name a few in Maharashtra, Andhra Pradesh, Gujarat, and Karnataka. It also has a retail presence in 300 outlets, mostly in South and Central Mumbai. “We hope to have a retail presence in the major big box retailers within the next three months and hope to open up in other states the rest of the country within the next six months,” Satyajit says.

EGK currently claims to sell about 30 metric tonnes of fresh fried onions every month, which means that it processes 150 metric tonnes of raw onions.

Satyajit says, “Our factory is currently upgrading to be able to produce 100 metric tonnes of fresh fried onions (500 metric tonnes of raw onions) by the end of April.” The team size of EGK Foods is around 100 employees with 70 people being labour.

Onion knight

Satyajit is fondly known in food circles as Onion Knight. He is a serial entrepreneur and has a string of startups that saw little or no success before EGK.

EGK Foods was bootstrapped into existence in December of 2014. Besides getting the finances right in the initial stages, dealing with a volatile onion market was another challenge. Over the last three years, it has raised a couple of rounds of investments from friends and family to help build the factory and manage working capital.

EGK claims to have grown from sales of 30 metric tonnes annually in 2016-17 to 30 metric tonnes in January 2018. “Next year, we project sales of 100 metric tonnes per month,” he says.

Its revenue model works on the economies of scale and investing in the right technology to keep the operating costs down. It plans to have backward integrated farms by the end of this year where it not only offers buy-back guarantees but also technology that would help in increasing yield.

Ready-to-eat market

India’s heat-and-eat food industry is expected to grow at a CAGR of 22 percent and will be worth Rs 6,405 million by FY 2019.

Some of the bigger players in this segment include MTR, Maiyas and iD Fresh Foods.

Talking about what sets them apart, Satyajit says, “Since we spin the oil out of our final product we are able to provide a consistent and relatively healthier option to any other tissue paper-dried fried onions you may make at home.”

For the future it plans on adding a basket of products complementing fried onions that have been requested by existing clients.

“We plan to make most of our progress in the B2B and Hotel/Restaurant/Cafee (HoReCa) space next year as well as slowly make a presence in the retail market through a presence in larger retail chains. We also plan to start our export business for which we have seen tremendous demand over the last one year,” says Satyajit.