SPARKS, Md. (AP) — Food and seasonings maker McCormick & Co. Inc. said Wednesday that it is forming a joint venture with Kohinoor Foods Ltd. of India to market and sell its basmati rice and food products in that country.
McCormick said it will invest $115 million for an 85 percent stake in Kohinoor Speciality Foods India Private Ltd., which will have a modern factory for packaged food products and 275 employees. The deal is expected to close later this year, subject to regulatory and other approvals in India.
The venture builds on McCormick's investments in India and its strategy to expand sales in emerging markets. Including India, McCormick expects emerging markets to contribute 12 percent of sales by 2015, an increase from 9 percent in 2010.
Annual net sales for Kohinoor Speciality Foods India are projected to be about $85 million. This year, transaction and closing costs are expected to more than offset McCormick's share of profit from the joint venture and reduce earnings per share by two to three cents. But the investment will start to add to earnings in 2012.
Kohinoor Foods makes and distributes rice as well as cooking pastes, spices, seasonings and frozen foods in India.
Shares in McCormick fell 51 cents to close at $49.68.