Ruchi Soya Industries, the Rs 5,000-cr flagship company of the Ruchi Group, will foray into the high-margin bio-fuels and palm plantation business this fiscal.
MUMBAI: Ruchi Soya Industries (RSIL), the Rs 5,000-crore flagship company of the Ruchi Group, will foray into the high-margin bio-fuels and palm plantation business this fiscal.
Highly placed sources added that the company would also expand its branded products portfolio and improve its distribution reach to increase margins. Ruchi is at present tying up with various retail chains, which would put the company on a different growth trajectory.
Sensing this rising demand for bio-fuels and palm, Ruchi Soya is readying a strategy for diversification subject to shareholders approval, the source added.
The company is also waiting for the government to frame clear policies on the subject and develop bio-fuel industry in the country.
Despite repeated attempts to contact, Dinesh Sahara, managing director, Ruchi Soya Industries, was unavailable. Amrita Sahara, head-business development, Ruchi Soya, declined to comment on the development at this stage.
But the official looking after the company’s foray into new business, on condition of anonymity, said, “The company is preparing for the new business forays as it was found that margins are much higher in these two categories.”
Analysts said with higher crude prices and the rising need for an alternate fuel, Ruchi Soya’s foray into bio-fuels and palm plantation business would gather momentum going ahead.
The agro-commodities sector, including soybean, is at an inflexion point and the company, which has a firm presence and global scale capacities, would be among the major beneficiaries of this uptrend.
Edible oil contributes more than 79% of Ruchi Soya’s current total branded sales of Rs 2,000 crore. Of the balance, vanaspati’s share is 20% and textured soy protein contributes 1%.
Soy oil (55%) and palm oil (41%) are the major contributors to branded edible oil sales. Branded sales have been growing at 25% and are expected to grow at a similar range in the coming years.
The packaged edible oil industry is growing at 15% per annum and is likely to maintain this rate in the near future.
The Ruchi Group manufactures edible oils, vanaspati, bakery fats and soya foods. Its brands include Soyumm (soyabean oil), Ruchi Gold (palm oil), Sunrich (sunflower oil), Mandap (mustard oil) and Nutrela (soya chunks and granules).The group has seven crushing and 12 refining units.
The group recently completed a major restructuring activity by merging the soy processing, vegetable oils & fats and foods business (SVF business) into one company - Ruchi Soya Industries Ltd.
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