Hindustan Unilever Ltd. has decided to discontinue the agreement with Jagatjit Industries Ltd. for the manufacturing and supply of malted milk food products, viz. Boost and Horlicks, at the manufacturing unit at Jagatjit Nagar, District Kapurthala, Punjab.
This agreement, set to expire on Dec. 31, has been concluded as per HUL's business decision, the liquor maker said in an exchange filing on Tuesday. "Accordingly, the existing agreement has come to an end today, i.e., on 31 December, 2024, and consequently, our company will not be further manufacturing the malted milk food products for HUL," the company said.
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However, the companies shall continue the business relationship for the supply of malt extract from its malt extract plant.
Jagatjit said it is committed to manufacturing malted milk food products independently and is confident in securing new partnerships, on the back of advanced facilities and access to essential raw materials like milk and malt extract.
The company has increased the production and sales of Malt Spirit, it said, a product witnessing robust demand due to the rapid growth of the Indian Malt Spirit market.
The company is also in the advanced stages of initiating commercial ethanol production from its 200 KLPD grain-based ethanol plant, expected to commence operations in the next quarter. This initiative is anticipated to significantly boost revenue and profitability.
Jagatjit Industries posted an over two-fold jump in consolidated profit to Rs 2.38 crore for the second quarter of this fiscal and in November said it has taken Rs 180 crore term loan from IREDA to set up a grain-based ethanol plant in Punjab.
Total income rose to Rs 187.06 crore during July-September 2023-24 from Rs 174.95 crore in the corresponding period of the previous year.
The shares of Jagatjit closed 0.21% at Rs 240 on Tuesday; this compares to a 0.14% decline of BSE Sensex. HUL shares also closed 0.71% lower at Rs 2,326.85 per share. While the shares of HUL have fallen 12.65% in the last 12 months, Jagatjit shares have risen 17.16%.
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