Hindustan Foods Ltd expands its presence into contract manufacturing of Sports Shoes with another acquisition

Hindustan Foods Limited, a leading contract manufacturer in the FMCG and consumer goods sector, announces a significant move to bolster its sports shoe manufacturing business through the acquisition of a sports shoe manufacturing unit situated in Kundli, Haryana. This strategic development is facilitated by its wholly owned subsidiary, KNS Shoetech Private Limited (KNS), and is formalized through a Business Transfer Agreement (BTA). The acquisition, valued at approximately Rs. 30.72 crores (subject to closing adjustments), marks a pivotal step in the company's expansion efforts within the sports shoes segment.

In alignment with its earlier announcement in October, where the company unveiled plans to invest up to Rs. 100 crores in the sports shoes manufacturing domain, Hindustan Foods had also disclosed the acquisition of 100% shareholding in KNS. This move underscores the company's commitment to fortifying its presence in the ever‐expanding sports shoes market.

The Indian sports shoes market has experienced substantial growth in recent times, driven by heightened consumer awareness regarding fitness and sports, coupled with an escalating demand for sports footwear that seamlessly combines comfort and style. According to a recent report in a leading newspaper, prominent brands like Puma, Decathlon, Adidas, Skechers, and Asics have exhibited remarkable year‐on‐year growth ranging from 35% to 60% since 2021.

Himmaj Soni, Head of the Sports Shoes Division, Hindustan Foods Limited commented on the acquisition, saying, "The acquisition of KNS Shoetech Private Limited in October provided us with a foothold in a fast‐growing industry, and this latest acquisition will propel us further. We are poised to fortify our standing in this dynamic sector and have charted plans for a brownfield investment in HFL's existing factory in Chennai to establish shoe manufacturing facilities in the South. This expansion not only extends our footprint but also positions us strategically, leveraging the proximity to the Chennai port to explore export opportunities."

Sameer Kothari, Managing Director, Hindustan Foods Limited added that, "We are committed to explore new avenues for growth and had identified contract manufacturing of sports shoes as an exciting area to be in. The company continues to assess additional strategic acquisitions and investments in related industries, solidifying its stature as a prominent player in the Indian FMCG and consumer goods sector. With a forward‐thinking approach, Hindustan Foods is well‐positioned to sustain its legacy of delivering high‐quality products to FMCG players nationwide."

Source : Equity Bulls

Keywords

HindustanFoods Acquisition Expansion ContractManufacturing SportsShoes KNSShoetech