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Amira Nature Foods Ltd. (NYSE:ANFI)

Q2 2013 Earnings Conference Call

November 20, 2012, 17:00 PM ET

Executives

Karan Chanana -- Chairman and CEO

Ritesh Suneja -- CFO

Ashish Poddar -- Executive Director of Finance

Rahul Nayar -- Director of Global Communications and Strategy

Analysts

Gautam Chhaochharia -- UBS

Eric Katzman -- Deutsche Bank

Akshay Jagdale -- KeyBanc

Athin Reddy -- Jefferies

Operator

Greetings and welcome to the Amira Foods' Second Quarter 2013 Earnings call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. (Operator Instructions). As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Rahul Nayar. Thank you, Mr. Rahul Nayar, you may begin.

Rahul Nayar

Good afternoon, everyone, and welcome to Amira Nature Foods' second quarter fiscal 2013 conference call. On the call today are Karan Chanana, Amira's Chairman and Chief Executive Officer; Ritesh Suneja, Chief Financial Officer; Ashish Poddar, Executive Director of Finance and [Anil Chawla], Vice President, Legal.

By now everyone should have access to the second quarter fiscal 2013 earnings release which went out today at approximately 4 PM Eastern Time. If you have not had a chance to review the release, it's available on the Investor Relations portion of our website at www.amirafoods.com. The call is being webcast and a replay will be available on the Amira website as well as amirafoods.com.

Before we begin, we would like to remind everyone that prepared remarks contain the forward-looking statements and management may make additional forward-looking statements in response to your questions. Such statements involve a number of known and unknown risks and uncertainties many of which are outside the Company's control that would cause its future results, performance or achievements to differ significantly from the results, performance or achievements expressed or implied by such forward-looking statements.

Important factors that could cause or contribute to such differences include risks detailed in our public filings with the Securities and Exchange Commission and those mentioned in the earnings release. Except as required by law, we undertake no obligation to update any forward-looking or other statements herein, whether as a result of new information, future events or otherwise.

Also on the Company's earnings release and in today's prepared remarks, we include EBITDA which is a non-IFRS financial measure. A reconciliation of EBITDA to the most directly comparable IFRS financial measures is included in the Company's press release issued earlier today, which has been posted on our website.

And with that, I'd like to turn the call over to Karan Chanana, Chairman and CEO.

Karan Chanana

Thanks. Good afternoon, everybody, and thank you for joining us. As you know, this is our first conference call as a public company and we are very excited to share our results with you today. I had the pleasure of discussing our story with many of you during our recent public offering roadshow. And before we get too far into our second quarterly results, I want to thank you for your interest and investment in Amira Nature Foods.

On today's call, I will provide a brief overview of our Company and our growth opportunities as well as some highlights of our second quarter results and Ritesh will review the financial results for the quarter in more detail. After that, we will open up the call for your questions.

For those of you that we did not meet on our IPO roadshow, I want to provide a brief overview of our Company. We are a leading global provider of packaged Indian specialty rice with sales in over 40 countries today. Our main operations include our rice processing facility are in around New Delhi, India and we have offices in Dubai, Malaysia, Singapore, United Kingdom and the United States in California.

Our Company history dates back nearly 100 years. We were originally founded in 1915 as an agro trading business. Amira has evolved from a domestic rice producer to an international branded rice and rice-based product Company. Today, we operate through Amira brand, third-party brands which we formed for the bases of our international expansion and through what we refer to our institutional segments which consists of bulk non-rice agricultural sales.

The core product of our business is Indian specialty rice, particularly Basmati. Worldwide, rice is a staple of many people's diet and it's especially popular in the densely populated regions in high growth emerging markets. Importantly, rice is allergy free. Basmati is a differentiated premium segment within rice. It's a specialty product only grown in the Indian subcontinent. The grains are slender, extra long, known for its aromatic characteristics. Basmati rice commands a premium compared to the overall rice industry and its growth has consistently been at a rate well above the overall rice industry particularly outside of India.

Our superior supply chains and manufacturing capabilities have enabled Amira to position itself as one of the leaders in this growing industry. The barriers to entry in rice processing and packaging are very high as it is highly technical and delicate process. So if a new company made a decision to enter this market, it would be a capital intensive process for them to compete. Over the years, we have always believed in investing in the best and we believe the growth for our product lines are proof of the way we offer the leading products from within our industry.

We are recognized by Planman Marcom as one of the six power brands in India. In addition to our core Basmati rice offering, we have successfully launched value-added innovative products in rice and adjacent categories. A couple of examples include Kheer Rice, which is a rice pudding delicacy; Khichdi Rice, which is a healthy product, comfort food and children's food and it is popular in many diverse regions of India and internationally. We have developed a ready-to-eat category in which we created dry snacks to capitalize on the expending snack market in India.

In our most recent financial year ended 31st March, 2012, our sales in India were 34% of our total sales. We are confident that India will continue to represent steady and consistent growth over the next several years. In this market, we have direct distribution centers in which we have direct relationship with our distributors across all 28 states. We serve the Indian market through both modern and traditional channels of retail. While we expect growth in both markets, we see a very strong upside to our increase, our presence in a modern retail India.

An example of our success in modern retail in India has been through our strong presence in Bharti Wal-Marts. We are currently in all 210 Easy Day Wal-Mart locations and all 23 Best Price Wal-Mart locations. We currently have penetrated 26% of modern retail in India and are confident that we will capitalize on the growth potential in the coming years.

Our international sales outside India represent approximately two-thirds of our overall sales. International sales has grown at a CAGR of 42% over the last three financial years, highlighting our ability to enter new markets and expand our business in existing international markets. Our third-party branded products represents the foundation of our international business.

The primary focus of our international expansion is partnering with leading international customers. For example, in the United States, we have a strong presence in Costco. We first entered Costco in 2010 with our own Amira brands and we are now in 134 of their 433 total locations. This makes Amira the leading Basmati supplier to Costco. We still have ample room to expand our sales with just one partner. This is just one example in one market. We've had similar success with local retailers and distributors in several markets ranging from UAE to Nigeria.

With our strong product offerings and diverse business models, we had laid the foundation for our future growth. As we look ahead, we have identified six distinct growth strategies, which are first one; accelerate global brand building and value-added offerings. We are continuing to evaluate market gaps for value products, future innovation in complementary categories. Strengthening that distribution footprint in India. As you know, India has a rapidly growing middle class and demonstrates very attractive demographic prints. We are focused on strengthening our direct distribution in key locations as well expanding our network of distributors while also capturing the significant growth opportunities presented by the increase in modern trade.

Third, further develop relationships with key retail partners. We have done a great job over the past couple of years cultivating relationships with Costco, Smart & Final and other leading retailers, but we have hardly scratched the surface of the full potential of the retail distribution of our products. Going ahead, leverage our international presence to enhance branded penetration and into that, expand into new high growth markets. We're currently in 40 countries and are targeting our expansion to be present in 70 countries in the next five years.

And to keep this pace of growth increasing processing capacity and operating efficiencies with a portion of the proceeds of our initial public offering completed last month, we plan to more than double our processing capacity by building a new state-of-the-art facility. This new facility is expected to be complete by fiscal 2015 and will enable us to bring all our production in-house, thereby reducing the need for us to purchase any finished product. Importantly, we expect that this will enable us to improve our margins as well as increasing our capacity.

Before I turn the call over to Ritesh, I would like to highlight a few business achievements we have accomplished during the second quarter and so far in the third quarter. Our second quarter revenue increased by 28.7% to $79.4 million and our EBITDA increased by 54.8% to $10.3 million in the second quarter. Amira India recently entered into an agreement with an Indonesian customer to supply 1.8 million bags of Indian white rice amounting to a little over $39 million within fiscal 2013.

We are pleased with our contract with this Indonesian customer as it underscores Amira's leading position as a global provider of Indian specialty rice. This deal will provide a steady and predictable revenue stream for the remaining 2013 and supports our key growth initiative of adding key retail and wholesale partners.

As we begin the second half of fiscal 2013, we are in a strong position to build off this positive first half of fiscal 2013 momentum and deliver solid financial results. Industry growth is extremely encouraging and we are positioned to capitalize on a number of growth opportunities around the world.

With that, I'd like to hand over the call to Ritesh to discuss our second quarter financial results in detail.

Ritesh Suneja

Thanks, Karan. Good afternoon, everyone. For the second fiscal quarter ended September 30, 2012, we reported net revenue of $79.4 million compared to $61.7 million for the same period in fiscal 2012, an increase of 28.7%. The revenue increase was primarily driven by sales volumes growth.

Revenue in the second quarter of fiscal 2013 for our Amira and third-party branded products was $78.2 million or 98.5% of total revenue compared to $53.2 million or 86.2% of total revenues in the prior year period.

Sales of bulk commodity products to institutional customers in the same quarter of fiscal 2013 contributed $1.2 million or 1.5% of total revenue compared to $8.5 million or 13.8% of total revenue in the prior year period.

Cost of materials including change in inventory of finished goods increased $11.7 million or 23.6% to $61.2 million in the second quarter of fiscal 2013 from $49.5 million in the same period last year. This increase primarily reflects the growth in Company's revenue. As a percentage of revenue, cost of material decreased to 77.1% in the second quarter of fiscal 2013 as compared to 80.3% in the three months ended September 30, 2011.

Profit before tax improved 572.8% to $4.5 million or 5.6% of revenue compared to $0.7 million or 1.1% of revenue for the second quarter of fiscal 2012. This strong improvement was due to strong top line growth as well as improving leverage in our overall business.

EBITDA, defined as profit after tax plus finance costs, income tax expense and depreciation and amortization was $10.3 million or 12.9% of sales in the second quarter of fiscal 2013 compared to $6.6 million or 10.8% of sales in the same period last year. Our improved EBITDA margin underscores our ability to leverage operating expenses across higher sales volumes.

Profit after tax for the second quarter of fiscal 2013 increased 291.4% to $3.3 million or 0.09 per diluted share compared to $0.8 million or 0.02 per diluted share in the same period last year. Following our initial public offering on October 10, 2012, the Company has 35.7 million diluted shares.

Turning briefly to our year-to-date results. For the first six months ended September 30, 2012, net revenue increased 23.9% to $159.5 million compared to $128.8 million for the same period in fiscal 2012. EBITDA increased 37.3% to $20.5 million compared to $15 million in the same period of last fiscal year. Profit after tax increased 157% to $6.6 million compared to $2.6 million in the same period last fiscal year.

Turning to our balance sheet, at September 30, 2012, our cash balance was $4.3 million and we had total investment of $163 million. On October 15, 2012, the Company completed an initial public offering and received approximately $81 million in net proceeds. We have used $52 million of these net proceeds to reduce a portion of our indebtedness. In addition to this, we will use approximately $24 million to invest in our planned expansion as Karan discussed in his remarks.

Assuming our receipt of these net proceeds as on September 30, 2012, our pro forma cash and cash equivalents and our total current and non-current debt as on such date were $33.3 million and $111 million respectively. We have retained $4 million to fund future operating expenses through 2015. After our successful listing in US, we have the opportunity to refinance some of our high cost Indian debt which will reduce the cost of our debt by lowering our new interest rate.

Now, I would like to turn the call back to Karan.

Karan Chanana

Thanks, Ritesh. As you can tell from Ritesh's summary, we had also a very strong start in fiscal 2013. I would now like to take a moment to thank Ritesh for all his contributions to Amira. Ritesh was instrumental in helping us to develop the financial systems and controls we have in place to be a public company. And we wish him a return to full health and best of luck in his future endeavors.

Ashish Poddar, currently our Executive Director of Finance will replace Ritesh as CFO. Ashish brings 15 years of financial experience to Amira. Most recently, he was a Senior Manager in the Finance and Enterprise Performance Division of Accenture Services Private Limited in India. Prior to Accenture, Ashish served as a Manager Equity Accounts at Yum! Restaurants International, working with Yum!'s Chief Financial Officer and Financial Controller to implement and execute financial controls, policies and procedures for many company-owned restaurants.

We're excited to have Ashish join our team and believe that his financial experience with global brands will provide a substantial contribution to Amira Nature Foods as we strive to further expand our global business. As a newly public traded company, we believe we will benefit from his financial reporting experience. In closing, we believe we are better positioned than ever before with the right team to achieve the guidance even at the time of the IPO.

And with that, I would like to open up the call for your questions.

Question-and-Answer Session

Operator

Thank you. Ladies and gentlemen, we will now be conducting a question-and-answer session. (Operator Instructions). Our first question is from Gautam Chhaochharia of UBS. Please go ahead.

Gautam Chhaochharia -- UBS

Hi, Karan and team. Congratulations.

Karan Chanana

Thank you.

Gautam Chhaochharia -- UBS

Just a couple of questions. One is can you throw some more color in terms of the mix between owned brand and third party private label brand in this quarter?

Karan Chanana

We haven't broken up our revenue between owned and third party brands on a quarterly basis and that's not public information, so that's not something we could share with you at this moment.

Ritesh Suneja

But just to add to what Karan was saying and to give you some color, both grew substantially higher than our forecasted revenue growth between export and (inaudible). So both have growth substantially higher, but we're not providing quarterly breakup of those numbers in detail.

Gautam Chhaochharia -- UBS

Got it. And this information (inaudible) so this falls under private label brand or (inaudible)?

Ritesh Suneja

No, this is third party branded.

Gautam Chhaochharia -- UBS

Okay. And one last question on pricing trends and outlooks. So what have you seen in the second quarter and what is your outlook going forward for next couple of quarters purely in a pricing sense, but a like-to-like similar category of price?

Ritesh Suneja

For this quarter, pricing was higher than the first fiscal quarter, but was flat or just slightly higher than the previous quarter in the year before corresponding quarter, fiscal Q2 FY '12, it was flat or slightly higher than that, but substantially higher than Q1. I will let Karan answer the question about pricing for the rest of the year.

Karan Chanana

Pricing from here we see a clear upward trend keeping in mind with the regular increase in pricing which happens year-on-year.

Ritesh Suneja

Gautam, we had spoken about 5% to 7% pricing increase for you in the past, which is an annual price increase in the business. We expect at least that going forward in the next two quarters.

Gautam Chhaochharia -- UBS

Thank you.

Operator

Thank you. Our next question is from Eric Katzman of Deutsche Bank. Please go ahead.

Eric Katzman -- Deutsche Bank

Hi. I'm not sure whether it's good morning or good evening, but congratulations.

Karan Chanana

Thank you.

Eric Katzman -- Deutsche Bank

I guess how should we think about this Indonesian contract win and how does that flow through over the next couple of quarters? Is the 39 million an annual run rate or is that what would you expect to benefit your top line just in 2013?

Ritesh Suneja

Thanks, Eric. That's a good question. Just to let you know, we had an order in the previous fiscal year also of the same customer, this is a repeat order. It is substantially higher than the previous order. A small portion of that order will be recognized in Q3 and the major portion of that order will be recognized in Q4. This is not an annualized number, this is the revenue number to be recognized in Q3 and Q4 of this fiscal year.

Eric Katzman -- Deutsche Bank

Okay. And that is going to be Basmati or is it just your basic white rice? And would that be – as such, how do you recognize that? Will that be part of the bulk product, or is that part of either the Amira or the third party business?

Ritesh Suneja

It is – as answered earlier, it is part of the third-party branded business which was similar in the previous fiscal year also. So it's third-party branded specialty rice non-Basmati.

Eric Katzman -- Deutsche Bank

Okay. And then I guess a couple of more questions if I could. From a financials, with the money that you raised for the – through the IPO, what do you now expect kind of interest expense to be for the full year?

Ritesh Suneja

We've forecasted interest expense earlier with you'll already and we stick to that forecast. We haven't changed the forecast on interest expense from the previous model we shared with you. So there's no change from that expect we've raised the lower amount of the IPO and we've adjusted interest expense on the lower amount raised, so we have slightly higher debt than we previously thought we did on the roadshow – the lower amount raise at the time of the IPO.

Eric Katzman -- Deutsche Bank

Got it. And then I guess it's kind of difficult to quantify but in the second quarter, I assume that you had some expenses related to the IPO. I mean was there – let's say in the 4 million of SG&A that you reported, was there something that may have been abnormally high tied to the deal or is that a clean number?

Ritesh Suneja

There are some legal and accounting expenses which were tied to the transaction, not terribly large but – which were expensed in that quarter, which we have not broken out. So that number has a small amount of IPO-related expenses.

Eric Katzman -- Deutsche Bank

Okay, all right. And then is there any change in your expectation given the mix of business as you see it in terms of the tax rate for the full year?

Ritesh Suneja

We do not expect a substantial reduction in tax rate yet that requires some restructuring and we spoke earlier which the Company will do after it refinances its debt and [hopefully] of low interest cost which is our next goal. And post that – based on the jurisdiction we use, especially in the Middle East, and a small amount of restructuring we will get a low effective tax rate, but we are not modeling that for the fiscal year.

Eric Katzman -- Deutsche Bank

Okay. And then last question, I'll pass it on. Karan, I guess we hear various – read various reports of lack of rain and potential impact on the rice crop in selected areas of India and in the Basmati growing region. I think you kind of said that you're not too worried about the pricing outlook if that continues to be 5% plus, but based on your experience in dealing with the growers and pricing, how should we read into some of these reports about drought and impact on the growing regions of the next crop?

Karan Chanana

Eric, good question. The Basmati growing region is geographically blessed, it is not depended on rainfall, it's a region where the farmers are wealthier in relative comparison to the non-Basmati regions and have the facility of groundwater harvesting for their crops. Secondly and more importantly, the region is fed by the five rivers of the Himalayas which also gives it the distinguished feature of having this product Basmati in that region. To answer your question particularly on the drought front, the drought which was predominantly in some parts of Southern India has no impact on the Basmati region in this crop year. The harvest is on as we speak and it's a healthy harvest.

Eric Katzman -- Deutsche Bank

Okay. Thank you very much. I'll pass it on.

Operator

Thank you. (Operator Instructions). The next question is from Akshay Jagdale of KeyBanc. Please go ahead.

Akshay Jagdale -- KeyBanc

Hi. Congratulations on the quarter.

Karan Chanana

Thank you.

Akshay Jagdale -- KeyBanc

Can you give us some more color on the sales growth here, I mean, from the disclosure that you have put out there, it looks like the third-party branded and Amira branded revenue in the quarter was up 47%, and you said primarily volume driven. Can you give us some color on sort of volume versus – and if there was any FX impact? I'm sure FX was a negative. So can you just talk to that a little bit?

Ritesh Suneja

I think Akshay as in the last fiscal quarter, FX was a headwind. The average FX rate in those quarters were very similar, so you can use that to be the same average FX rate in the previous two quarters, the June to September quarters ending FY '12 were again very similar. So similar FX drag in Q2 as in Q1. Despite that we grew revenue in dollar terms at 28.7%. We again say that volume was substantially -- taking into account FX, volume was substantially the major driver of growth growing both India which grew very, very strong and international revenues which also grew very strong. The Amira branded business again was – it grew superbly strong and third party business. So volumes in the range you mentioned, everything was extremely strong this quarter.

Akshay Jagdale -- KeyBanc

Yeah, I mean just to follow-up on that just to make sure I have -- at least I'm in the right direction of ballpark here. So your disclosure, we can actually derive the branded and third party growth rate which was 47% which is better than the total growth rate of 28%-ish. So 47% is the dollar sales growth and FX in my estimates was a double digit drag and you said pricing year-over-year was not a factor. So I'm getting to close to 60% volume growth. And I far off there?

Ritesh Suneja

No, I think volume with what you earlier mentioned, I think you have to take into account the intuitional business, which is non-core business we discussed during the IPO, the focus is rice. Amira brand is rice and third party brand is rice. The intuitional business fell substantially as a percent of revenue in this fiscal quarter as compared to the corresponding previous fiscal quarter of FY '12. So if you look at rice volume itself, you're close.

Akshay Jagdale -- KeyBanc

Okay. Yeah, I was referring to just rice. So that's good. And then just give us a little bit more color on the crop – you talked about the price increase 5% to 7% and this is I guess last year's crop that you're selling and then you're starting to procure this year's crop, right, 50% of the crop you'll procure from now until December and do I have that right? And if so, can you just talk about this year's crop a little bit and what you're seeing?

Ritesh Suneja

I'll ask Karan to answer the question on – his knowledge and outlook on the early feedback on crop purchase and what he's seeing in the market in terms of pricing.

Karan Chanana

The crop is under harvest. It looks strong. It's a healthy crop. Volumes are good and so is the demand forecast for the industry. And the pricing is up in the region of 5% to 7% and we see the same going – following through. We are in our purchase mode and we're following as planned because harvest has just begun a little over two weeks ago.

Akshay Jagdale -- KeyBanc

And what are the early estimates for the size of the crop?

Karan Chanana

The size of the crop is going to be about 5% to 7% higher than last year. The earlier guesstimate, as you know, India is difficult to have a correct estimate especially when we are just barely 18 days into the harvest of the crop.

Akshay Jagdale -- KeyBanc

Okay, great. And then just a little bit more color on the demand growth. You talked about all the growth leverage being extremely strong. So starting with volume, overall was strong. Branded was strong. Third party was strong. You said domestic and international was strong, but just give us some color there on sort of what's driving international growth? Is it the same countries that have been driving the growth historically and is it the same factors driving the domestic growth as well? Just a little bit more color on the growth?

Karan Chanana

I will give you some information there. As you know, we expect we were enhancing our distribution capability in India. You saw the effect of that in Q1 where the Indian business product in terms of growth as compared to some of its previous years. That has accelerated by a factor of close to 2 than what we had in Q1. We expect this growth to continue.

On the international side, the same markets we've spoken to you earlier about have all grown substantially. We've entered new markets in Africa with our own brands. It's again very strong in that regard for shipment already done in Q2 and again looking forward in Q3, extremely strong shipments for the Amira brand there also. So again, very strong numbers across the board. Demand is based on market penetration, distributor penetration and we are completely focused on that.

Akshay Jagdale -- KeyBanc

Okay. And one last one, I thought I heard Ritesh say something about refinancing the Indian debt. I mean is that – can you explain that? I mean is that already in your numbers or how should we think of that? I know Eric asked about interest expense, but just talk about the refinancing of Indian debt and is that the same as sort of the refinancing of your overall debt portfolio that you were thinking of doing?

Ritesh Suneja

Yeah. So at the time of the IPO we spoke about and said some of the low hanging fruit in terms of increased capital efficiency or the refinancing of high cost debt. Nearly all that debt is in India, close to 12% or of the 12% cost to debt as we spoke to you about earlier on the road. We are in a process of discussions with banks in terms of setting up a structure of refinance back and access lower (inaudible) cost of capital. We hope to have – to start working on that post this earnings release and hopefully – and have some good news in the near future. Those numbers are not modeled in or not forecasted at this stage. At the time of the IPO also we said that these are – this is additional upside to the investor and really 3% to 4% points benefit that is substantial upside from an EPS perspective.

Akshay Jagdale -- KeyBanc

Okay, thank you. I'll get back in queue. And congratulations again.

Karan Chanana

Thank you.

Operator

Thank you. Our next question is from Athin Reddy of Jefferies. Please go ahead.

Athin Reddy -- Jefferies

Good evening. I just wanted to follow-up on the rice contract you talked about in Indonesia. You said the volume for the contract is up meaningfully. What's the driver behind that volume increase? I'm sure it's not population growth in Indonesia alone?

Karan Chanana

Yes. We've got a contract which is about $39.4 million. It's higher than our previous contract with the same customer. Obviously, the customer is happier, more satisfied with our performance. Thereby we've taken a higher share of his Indian purchase and that's our understanding.

Athin Reddy -- Jefferies

So last year, that was the first time you sold to this customer. Is that how I should understand it and now you're turning it more to a permanent relationship?

Karan Chanana

Yes.

Athin Reddy -- Jefferies

Okay. And is the price that you get for the rice that you ship to Indonesia, by my math the price you get there is below what you're kind of average price of rice is. Is the math correct?

Ritesh Suneja

I guess from a pricing standpoint, and Karan will add to that, This is non-Basmati rice, so it is ballpark similar to previous sales and especially there is market pricing for non-Basmati Indian specialty rice which we've done before.

Athin Reddy -- Jefferies

Okay, perfect. Thank you.

Operator

Thank you. (Operator Instructions). We have another question from Akshay Jagdale of KeyBanc. Please go ahead.

Akshay Jagdale -- KeyBanc

On that Indonesian rice contract, what percentage growth are we talking for the same customer? Have you disclosed that? Are you willing to say because…?

Ritesh Suneja

It is…

Akshay Jagdale -- KeyBanc

Yeah, go ahead.

Ritesh Suneja

Yeah, Akshay, it is higher – the growth is higher than our 20% forecasted revenue growth for the Company?

Akshay Jagdale -- KeyBanc

Okay.

Ritesh Suneja

I don't want to give you exact numbers which are confidential, but it's higher – that contract itself is higher – essentially higher than the revenue growth we forecasted for the Company.

Akshay Jagdale -- KeyBanc

Right. And you – the $39 million, part of it is like based business, like you shipped them some stuff last year. So you would have included that in your sort of guidance. But what we should assume is a portion, whatever that portion is, a significant portion of the $39 million is just – wasn't included in your previous outlook, correct?

Ritesh Suneja

Yes. I could just explain that to you. We had assumed a certain growth rate for that customer year-over-year. We had beaten that growth rate for this customer in terms of what we had forecasted and what we received. So there's some extra revenue outside in that result for this fiscal year here.

Akshay Jagdale -- KeyBanc

Okay. And just a more broader question, so 50% growth on volumes for rice in general for you guys, I mean obviously that's very impressive. My understanding is that the market itself, the Basmati rice specialty, Indian rice market is not going at that rate. So clearly, it looks like you're gaining share and those share gains recently seem to have accelerated. So am I viewing that first of all correctly? And secondly, what's the main driver of that?

Ritesh Suneja

I think we had spent time during the IPO explaining that the Indian market is very fragmented, totally fragmented in terms of distribution. We have spent time explaining to you why in fiscal FY '12 our Indian revenue growth was not as high as – was not as high in FY '11 as in previous years and in FY '12, it had caught up and we had spoken to you in Feb that this both will then accelerate. This is an example of the distribution changes we've made in that year which are showing FY '12 and are increasingly showing up in FY '13. We [believe] as one of the few organized players in this market, we will gain market share.

Akshay Jagdale -- KeyBanc

Okay. So one last one I promise. On the international markets, like one of your strongest markets is the UAE and we're trying to figure out when demand in that market will saturate? So one of the exercises we did was we just looked at how much rice are they importing from India and taking it as a percentage of their overall rice consumption and it seemed to be – the number we came out with said – told us that they may be re-exporting Basmati rice. How do you guys think of some of your exports at growth markets and what point we'll see saturation in those specific markets, just want to understand how you think of that?

Rahul Nayar

I'll answer first and then let Karan after that. From our standpoint, we do not see saturation in the Middle East market one, because it's third party business but secondly we've launched our own brand there and are very early stages of doing that. As part of the IPO we had shared with you the retail sector in the Middle East and our penetration. And our focus again is increased penetration.

As we've discussed during the roadshow, the main upside in the low hanging fruit is increased penetration throughout emerging market space, whether it's Indonesia, whether it's India, whether it's UAE, whether it's Africa as well low hanging fruit penetration for organized player in the state that grows. So we don't see any issues with market saturation at this stage. I'll let Karan answer that.

Karan Chanana

Absolutely. The Middle East and all emerging markets have young populations, growing populations that has lot of growing activities, the GDPs are growing at high single digits growth rates. And as populations are getting wealthier there, they are trading up and consuming a lot more of specialty rice and sitting on top of the best specialty rice is the Indian Basmati. Like Rahul said, we don't see any saturation in that market in the foreseeable future.

Akshay Jagdale -- KeyBanc

Okay. Thank you very much.

Operator

Thank you. Our next question is from Eric Katzman of Deutsche Bank. Please go ahead.

Eric Katzman -- Deutsche Bank

Hi. Thanks for taking the follow-up. I guess first question is now that you have the proceeds from the IPO, you're sitting on the funds to start building the new facility. Where do you stand on that? Has there been any changes in terms of the timeline since the IPO? And then I have one other follow-up.

Ritesh Suneja

Thanks, Eric. To clarify and reconfirm, we still confirm the forecasted time of December 2014-fiscal 2015 as the time for the new plant. We are deep in process on that execution. As you'll see, we have kept aside the cash portion for that plant separately and our in the process of execution as we speak.

Eric Katzman -- Deutsche Bank

Okay. Thank you for that. And then I think during the IPO there were some questions about a relatively sizable order with the Philippines that was seized by the Philippines government and then it was in some kind of discussion. Is there any resolution on that issue yet and how does that affect or did it affect the quarter and how we think about that this fiscal year?

Ritesh Suneja

Thanks. It's a really good question, Eric, as we've spoken earlier and the goods which had been seized by the customs in the Philippines was sold in Q1. The sale was recognized in Q1. The cash proceeds of receipt there is no downside or upside related to that sale. From a business perspective, the only contingent – potential contingent liability was would there be any legal action taken against the Company to clarify.

Till date, there has been no legal action taken against the Company and both our auditors and lawyers internal and external have received comfort from Philippine Council that they don't believe there is any reason for the Company to get any legal action in the future either. So from an income revenue financial perspective that transaction closed for us in fiscal Q1 of this year and there is no downside or upside expected from that going forward at all.

Eric Katzman -- Deutsche Bank

Great. Thank you.

Operator

Thank you. We have no further questions in the queue at this time. I would like to turn the floor back over to management for any closing remarks.

Karan Chanana

Yes. Thank you for your questions and interest in Amira. We are at a very exciting time for our business and our excited to share our story and growth within the Amira investment community. Over the next several months, we will be attending select investor events in the United States and we hope to see many of you there. We look forward to speaking with you again when we report our third quarter financial results in February. Thank you, again. Have a good day.

Operator

Thank you. Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

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