‘Our focus is on reducing inefficiencies in supply chain’

Friends for many decades, Mayank Dhanuka and Sunoor Kaul saw a need for a venture in the agri-logistics space as there wasn’t an organized player to provide end-to-end services in the country. When they started Origo, there were multiple services providers who were providing one or the other service. Multiple and small services providers led to wastage of grains and commodities as well as made the segment highly inefficient.

Since the launch of the company in 2010, Origo Commodities has been focussing on improving the inefficient supply chains across the country for agricultural commodities. In these five years, Origo has grown with an employee strength of 1,000 and a turnover of approximately ₹150 crore. Over the next year, it plans to increase its turnover to ₹450 crore.

Founder and Director Sunoor Kaul, in an interview to BusinessLine via e-mail, provides details of the company’s plans and outlook. Edited excerpts:

We have been hearing that Origo Commodities is planning to raise its capital? How does it plan to raise resources?

Origo Commodities will raise its resources externally as and when it is required. We are yet to take a decision on it.

What made the company enter the field of warehousing and commodities?

An average of nearly 15 per cent of grains and close to 40 per cent of perishables is wasted in India due to improper infrastructure and inefficiencies in the supply chain. Origo’s focus has been to create a socially responsible business; and hence it has directed its efforts towards reducing these inefficiencies in the supply chain. This is done primarily through creating the maximum benefit for the farmer community by reducing post-harvest losses and maximising the price realisation for farmers.

Origo’s business model extends all the way from procurement at the farmgate, transportation to warehouses, quality certification, scientific storage, and warehouse receipt financing so that farmers can monetise their produce and market linkage. Origo operates across three business verticals – procurement, warehouse management and collateral management.

What sort of role does Origo envisage to play in warehousing in the long-term?

Origo has long-term goals to scale up its operations to become a ₹2,000-crore business in four years and also develop a strong mid-management team to take the company to the next level.

The company will soon be scaling up its existing lines of business and also increase investments in infrastructure, warehouse and private mandis and to develop its own NBFC.

What are the commodities under Origo’s management?

Origo helps manage a wide variety of commodities, ranging from grains such as wheat, rice, maize, cotton, barley, coriander and groundnut.

Total commodity under Origo’s management is approximately $1.5 billion stored in over 300 warehouses. The company works with many government institutions in handling grains on behalf of FCI and State governments. Currently, Origo Commodities is handling approximately 27 lakh tonnes of rice, paddy and wheat for PUNGRAIN on behalf of Food Corporation of India (FCI) in Punjab. Origo is also working with the Punjab State Warehousing Corporation to manage grain handling in its warehouses. It is also in talks with many other States and warehousing corporations to manage grain handling operations.

Are Origo’s warehouses approved by WRDA? Has the company got in touch with any of the commodity exchanges for extending its services?

Origo works with commodity exchanges as their warehouse service providers.

It currently works with ACE Commodity Exchange handling multiple commodities across locations. Origo has obtained WRDA accreditation for some of its warehouses for some locations and its attempt always is to do across all locations.

How does the company see the Government’s initiatives helping the company?

The Government over the years has taken positive steps towards creating a sustainable environment for agri-supply chain players including farmers, traders and logistics companies especially the warehousing players.

The warehousing subsidy and subsidies related to agri-market linkages are in place to help create the right ecosystems.