Ruchi Soya Q4 net zooms over 2-fold to Rs 78.6 Cr

Edible oil company Ruchi Soya Industries Ltd today reported over two fold jump in standalone net profit at Rs 78.58 crore for the quarter ended March 31, due to lower financial costs, higher export realisation and increased sale of branded oils.

It had posted net profit of Rs 28.32 crore in the same quarter last year, the company said in a filing to the BSE.

Ruchi Soya Managing Director Dinesh Shahra said: "The net profit has improved substantially both during the fourth quarter and the entire 2012-13 fiscal due efficient control on financial cost."

Higher sale of branded cooking oils and increased realization from export of oil-seed extraction and other food products improved the overall company's performance, he said.

As per the filing, net income increased to Rs 7,553.96 crore in the fourth quarter of the 2012-13 fiscal, from Rs 7,034.7 crore in the same period of last financial year.

Tax expenses and financial costs remained lower during the quarter under the review, though expenses were slightly more than the year-ago period, it added.

For the entire 2012-13 fiscal, the company's consolidated net profit zoomed more than 3-fold to Rs 284.21 crore as against Rs 87.96 crore in 2011-12.

Net income, however, fell marginally to Rs 29,871.25 crore from Rs 30,270 crore in the review period.

Shahra said that sale of branded edible oil increased to Rs 6,217 crore in the 2012-13 fiscal, from Rs 5,543 crore in the previous year.

Similarly, export of oil-seed extraction and food products increased by 34% to Rs 4,374 crore from Rs 3,264 crore in the review period, he added.

A leading producer of edible oils, soya foods, vanaspati and bakery fats, Ruchi Soya is also a major exporter of soya meal, lecithin and other food ingredients from India.

The company's scrip rose marginally to close at Rs 69 on the BSE today.

CM LAUNCHES ‘SOYBEAN OIL FORTIFICATION' PROJECT

Chief Minister Shivraj Singh Chouhan said Ruchi Soya Industries Limited (Ruchi Soya) will play a pivotal role in the project on ‘Soybean oil fortification’ in Madhya Pradesh. Under this project, largest selling Soyabean oil brand in the State ‘Mahakosh’ will now have additional health benefits of Vitamin A and D.

Chouhan was launching soybean oil fortification project here on Monday. Minister of Science and Technology and Food Processing Kailash Vijayvargiya along with several other dignitaries were also present on the occasion.

Centre for Community Economics and Development Consultants Society (CECOEDECON) has been working on ‘Soybean oil fortification’ in collaboration with the United Nations affiliated body, Global Alliance for Improved Nutrition (GAIN) and edible oil manufacturers in Madhya Pradesh.

Under this project, soyabean oil by leading companies will be fortified with the essential Vitamins A and D.

This initiative aims to curb malnutrition in Madhya Pradesh with a primarily focus on the nutritional security. Sarvesh Shahra, Business Head, FMCG and Specialty Ingredients, Ruchi Soya Industries Limited, on the occasion said the objective of the soyabean oil fortification project in Madhya Pradesh is to reduce health related problems arising due to Vitamin A and D deficiencies in the State.

“We are happy to partner with the NGOs and offering healthier options to the consumers of our soya oil brand Mahakosh in Madhya Pradesh”, Sarvesh said.

We will also work closely with NGOs like CECOEDECON and GAIN on the awareness generation campaign on Vitamin A and D deficiency and the strategies to address it,” he added. 

Ruchi Soya enters tomato biz

Ruchi Soya, edible oil and soyabean product maker, is foraying into processed tomato business.

The company has formed a joint venture with Kagome, a tomato product company of Japan and Mitsui, a trading and investment firm.

Ruchi Soya will hold 40% stake in the joint venture — Ruchi Kagome — while the remaining 60% will be held by a special purpose company (SPC). Kagome and Mitsui will hold 66.7% and 33.3%, respectively in the SPC.

The venture will initially produce tomato puree, ketchups, pasta sauces and so on, and may enter beverages and other categories, going ahead.

Sarvesh Shahra, business head-consumer brands division, said despite India being the second-largest producer of tomatoes in the world, only 1% of it is processed, which spells big opportunity.

The company is investing `44 crore for setting up a facility in Maharashtra. It will start marketing the products from mid 2013, but start production only mid 2014.

Dinesh Shahra, MD, Ruchi Soya, said the local processed tomato market was `600 crore in 2011 and is expected to touch `2,000 crore by 2017.

Big boost to oil palm cultivation

Promising to promote oil palm cultivation in Odisha through partnership with farmers, leading FMCG player Ruchi Soya today said it plans to set up a processing plant in the state at a cost of Rs 30 crore.

“Ruchi Soya is the largest player in Odisha with access to 28,000 hectares land in Mayurbhanj, Balasore, Bhadrak and Kendrapara districts,” Dinesh Shahra, Founder and Managing Director of Ruchi Soya told reporters here.

Under a tripartite agreement with Odisha government and farmers, Ruchi Soya has exclusive rights to procure Fresh Fruit Bunches (FFB) of oil palm from farmers. Upon receipt of the raw material from the farmers, the company will pay to the farmers on every 20th day directly through their bank accounts. There are no middlemen in the transaction, he said.

The entire process is transparent. Rates of FFB are linked to international prices of palm, thus availing benefits of global markets to local farming community,” he said.

Since Odisha occupies an important position in the company's operations, Ruchi Soya has decided to establish a plant in the state to manufacture crude palm oil at an investment of Rs 30 crore, Shahra said, adding, the plant will be operational in one of the four districts under oil palm cultivation in two years.

Ruchi Soya may initially set up 10 tonnes per hour FFB processing mill. Presently, we are associated directly with over 4,000 farmers. At present, over 6,000 persons are directly or indirectly linked with this project which has a larger employment generation potential, he said.

Voicing concern over huge imports of edible oil, he said over 50 per cent of edible oil consumed in India comes through import. Total imports of vegetable oil, including crude and refined, is set to hit a new record of 10.8 to 11 million tonnes this year, Shahra said.

Ruchi, ITC amongst top consumer firms

Edible oil manufacturer Ruchi Soya and FMCG giant ITC are the only two Indian companies that figure in the top 250 consumer products companies in the world, according to the Deloitte report titled Global Powers of the Consumer Products Industry 2013.

Ruchi Soya, which made net sales of $6272 million in the financial year (FY) of 2011, is ranked 121 in the list. ITC, whose food, drinks and tobacco businesses made net sales of $5,461 million in FY 2011, slipped seven positions to 150 in this year's report. The two companies are also included in the list of the 50 fastest growing companies in the world.

Korean electronics maker Samsung topped the global list, followed by Apple, Panasonic, Nestle and Proctor & Gamble in that order.

54.8% of the companies on the list are from the food, drinks and tobacco sector, followed by personal and household groups (10.4%) and electronics goods (9.2%). The sales of the world's 250 largest consumer products companies grew by 7% on year-on-year basis, with the aggregate sales exceeding $3.12 trillion, up from $2.82 trillion in fiscal year 2010.

The report points out that the global economy was driven by consumer product sector, which is fuelled by online sales. "The impact of this digital growth on consumer and shopper behavior cannot be underestimated. It affects the way consumer interact with brands, how they research products and purchase (them)," says the report. The report findings suggest that roughly 58% of consumers who own a smartphone use it for store related shopping.