What we achieved in the area of Vitamin D in the last decade is what we seek to achieve
in the nutraceuticals space across the next ten years.
Overview
If there is a singular overarching message of this annual report, then it is this: ever
since we remember we were told that food is important for our existence.
The time has come to add a prefix: the word ‘fortified’.
The increasing relevance of this word is derived from the fact that the world faces a
large economic burden arising from malnutrition. India is ranked an alarming 102 out of
117 countries in the Global Hunger Index (GHI), a reflection of chronic and acute
undernutrition. Malnutrition is the most common cause of immunodeficiency, with
micronutrient deficiency and protein-energy malnutrition being at the core of the
challenge.
The trinity of dietary diversification, food fortification and supplementation are
required for overcoming micronutrient deficiency. Fermenta’s products enjoy extensive
applications across supplementation and fortification, which play a large health role.
Fortification of staple foods is being widely acknowledged as one of the most effective
ways for combating micronutrient deficiency across age groups. The addition of
micronutrient premix to food to enhance the nutritional quality is a scientifically
proven, cost-effective, scalable and sustainable solution. In the last few years, there
has been a greater impetus to the fortification movement. Forward-looking governments are
recognising that the cost of proactive food fortification is but a fraction of the cost
arising out of reactive remedial action, which could include the cost of medicines and
hospitalisation. Following the pandemic, the inflection point is here and now. What years
of advocacy barely achieved is now a global demand for increased immunity derived from
balanced food consumption.
At Fermenta, we are prepared for this reality. The addressable market is large and
growing: there is a multi-decade growth headroom available in this segment. We are
investing long-term resources to address this opportunity. We believe that this business
represents our new frontier; what we achieved in the area of Vitamin D in the last decade
is what we seek to achieve in the nutraceuticals space across the next ten years. What
provides me confidence and optimism is that we possess the vision, synergic capabilities,
technological competence and operational discipline to make this happen. We are
competently placed to provide the complete basket of products (either manufactured within
or outsourced) that makes a single-point solution provider. What we have going for our
business case is that we are prudently borrowing, we have a widening global presence
through subsidiaries, our manufacturing discipline has been validated by demanding global
customers and certifications and we have demonstrated the capacity to build and sustain
eco-system relationships across the long-term.
The result is that we are not just engaged in growing our business from quarter to
quarter; we are engaged in capitalising on a structural shift with a fundamental change in
the way we see our business across the coming decade. We expect to address this sizable
opportunity with a prudent mix of debt and internal accruals, which are intended to
enhance value in the hands of all those who own shares in our Company.
Mr. Sanjay Buch
Chairman