Ruchi Soya to raise capacity

Ruchi Soya Industries (RSIL), the Rs 8000 crore edible oil major, is investing close to Rs 50 crore to set up new plants and expand its current refining capacity. The new plants will start production in two years.

Under the expansion plan, RSIL is planning to increase its overall refining capacity by 6 lakh tonnes to 30 lakh tonnes. The daily capacity of the Patalganga refinery in Maharashtra will be hiked from 800 tonnes to 1100 tonnes. This will entail a negligible investment as the expansion would be carried out using the existing plant and machinery with a new process of refining.

RSIL is also on the lookout for acquiring two soybean crushing plants in Madhya Pradesh and a rapeseed crushing unit in Rajasthan for which due diligence is in progress. "We have already seen some closed plants in these states but formal bidding process is yet to start," said Dinesh Shahra, MD.

"We do not know the fund allocations to these proposed acquisitions as the pricing would depend upon the proposal of the Board of Industrial and Financial Reconstruction (BIFR), the nodal agency to sell the plant after closure. But, we are looking at a mid-sized plant with an accumulative investment between Rs 35 crore and Rs 40 crore," he said.

When asked about the logic behind acquiring a closed unit instead of setting up a greenfield project, Shahra said, "the gestation period in the former is lower than the latter". The funding for the expansion-cum-acquisition programme would be met through internal accruals.

RSIL is also planning to launch two new edible oil brands in order to strengthen its presence in the mustard oil segment. "We are strengthening our distribution network to compete with the region-specific brands across the country, especially in groundnut oil and mustard oil," said Amrita Shahra, head-business development. "We are facing severe competition from regional brands," she added. RSIL is presently offering a wide range of food products including palm oils, soya foods, vanaspati and bakery fats. Nutrela (soy chunks, granuels, soya flour) is RSIL's flagship umbrella brand for soya foods.

In addition, it has brands such as Nutrela Soyumm (soyabean oil), Ruchi Gold (palmoline oil), Sunrich (sunflower oil). It is continuously innovating new variants like Nutrela Vitamin Sunflower Oil and Nutrela groundnut oil.