Fitch rates Samprash Foods

Fitch Ratings said it assigned a national long-term rating of B(ind) to Samprash Foods Pvt. Ltd., along with a B(ind) rating on its Rs. 300 million long-term debt and B(ind)/F4(ind) rating on its Rs. 179.5 million fund-based working capital limits.

The outlook is stable.

The ratings reflect the company's experience in the field of dairy products manufacturing and its established milk collection centers to support increased production capacity after completion of its ongoing expansion project, Fitch said.

Fitch noted that the company stopped its operations in October 2010 to build a new manufacturing plant at the same site after demolishing the old one.

The new plant is expected to be commissioned by October 2011. The company makes ghee (clarified butter) and butter, the agency said, and sells the by-product - skimmed milk - in the open market.

It now plans to introduce skimmed milk powder in its product portfolio, which is a value-added product and commands higher margins than skimmed milk, Fitch said.

The ratings are constrained by the company's small scale of operations and the capital expenditure execution risk, the agency added.

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