Featuring among the top five FMCG players in India, with a turnover crossing Rs. 13,000crores, Ruchi Soya Industries Limited is the flagship company of Ruchi Group ofIndustries. Besides being a leading manufacturer of high quality edible oils, vanaspati,bakery fats and soya foods, Ruchi is also the highest exporter of soya meal and lecithinfrom India. Nutrela (soya chunks, granules and soya flour) is the largest selling soyafoods brand in the country.Ruchi is a leading branded edible oil supplier. Nutrela Soyumm (Soyabean Oil), RuchiGold (Palmolein Oil), Mahakosh, Sunrich (Sunflower Oil) and Mandap (Mustard Oil)and new healthy oil variants like Nutrela Vitamin Sunflower oil and Nutrela Groundnutoil make Nutrela a trusted option in edible oils.Superior procurement and trading skills, continuous innovation, an endeavor to meetconsumer needs and stringent quality control standards have enabled Ruchi to emerge asa highly-respected and admired Indian company.Ruchi Soya Industries Limited is listed on Bombay Stock Exchange Limited (BSE Code:500368), National Stock Exchange of India Limited (NSE Code: RUCHISOYA) andDelhi Stock Exchange.THE SOYA REVOLUTIONIn early 1960s Mr. Mahadeo Shahra created awareness on the potential of soya cropamongst the farmers in the state of Madhya Pradesh in India. He was instrumental inbringing up a small green revolution in the state, by introducing and encouragingsoyabean cultivation on a commercial scale. Today Madhya Pradesh is considered asSoya bowl of the country, and contributes to approximately 60% of its production.Despite all odds, Ruchi is now a leading player in the country in edible oils, soya foodsand processed foods categories. This is largely due to its strict adherence to quality andcontinuous innovation to keep with the times. Also, Ruchi has evolved from being a largemanufacturing firm to a respected brand, keeping in line with the FMCG players. ItsNutrela and Ruchi Gold brands have captured leading positions in the soya foods andedible oils categories respectively. Ruchi has also ventured into other businesses likebakery specialties, where it foresees a big potential for growth. With its innatemanufacturing and logistics advantages, and its foray into the branded sector, one onlysees immense potential for the growth of Ruchi in the future.BRANDSOver the years, Ruchi Soya Industries Limited has grown to become a multi-million USDollar company. Two of our strongest brands, Nutrela and Ruchi Gold are category
leaders.Nutrela, the most respected soya foods brand in the country, enjoys sizeable marketshare. It has enjoyed the trust of consumers for last 24 years now, and continues toexpand its range to cater to varying needs of its consumers. It has become generic to thesoya category. We have effortlessly strived to educate people about health and goodnessof soya as our firm commitment is to provide healthy solutions to the consumers.Our edible oils brands like Ruchi Gold and Nutrela Soyumm enjoy mass acceptabilityand acclaim from the people. Ruchi Gold is the leader in the palmoline category. As apart of packaged goods thrust, Ruchi Gold was introduced in Chennai. Today, it enjoysleadership position in branded palmoline oil category.Mahakosh Refined Soyabean Oil is known for its purity and premium taste, its nutritionalqualities enhance its health quotient. It contains fats that may help in reducing serumcholesterol levels and omega-3 fatty acids that protect against heart diseases.Nutrela Soyumm ranks in one of the most popular oils in the category, and continues tostrive to reach the top position. Both brands symbolize health and quality.We are also a leading vanaspati manufacturer with brands like Ruchi No. 1 and have alsoventured into bakery and special fats category.MARKETING STRENGTHSThe extensive distribution network, built over the years, is a major strength for RuchiSoya Industries Limited. Catering nationally through over 6.25 Lac retail stores, with 96Company depots, over 3200 distributors and a sales staff of over 200, Ruchi hasattempted to penetrate depth wise, along with opening new markets. With its emphasis onproviding value goods to consumers, dual strategy of Ruchi on popular and premiumrange works well. ‘Ruchi Gold’ and ‘Sunrich’ are our value for money offering but withno compromise in quality. This positioning helps generate large sales volumes for theproducts. Our Nutrela series is more premium, and offers healthy options in soya foodsand edible oils. This dual strategy is based on our cultivated understanding of the Indianconsumer psyche.EXPORTSRuchi Soya Industries Limited is the Flagship Company of Ruchi Group, a pioneer soyaprocessor group, which started operating back in 1972-73 and is the first exporter ofSoyabean Meal from India. Over the years, Ruchi has become one of the largest crushersof soyabean in India and presently has installed crushing capacity of about 4.1 milliontons annually in 12 plants. Being a leading crusher, Ruchi with its annual export of about
6 lacs tons has also become one of the largest exporters of Indian Soyabean Mealaccounting for nearly 25% of the total soyabean meal from India. Soyabean meal (de-oiled extractions / cake) is obtained after crushing of seed and extraction of oil by solventextraction process. Soyabean meal is considered as one of the most valuable raw materialfor preparing poultry / aqua / animal feed in the world market as it contains a very highpercentage of protein. Ruchi produces different grades of soyabean meal viz. de-hulled,high pro and normal FAQ varieties.Ruchi has been able to create a strong niche in the international market for its soyabeanmeal which is in high demand particularly by the quality feed producers in South EastAsia, Far East and Middle East markets.Besides, Ruchi is also able to export high end value added products like edible de-fattedsoya flour, full fatted edible flour, soya lecithin, soya granules, soya flakes and soyachunks etc.All the products produced by Ruchi enjoy ready accessibility in the export marketnamely, Japan, Vietnam, Indonesia, Thailand, Philippines, South Korea, Taiwan, MiddleEast countries apart from Indian Sub continent countries namely Bangladesh, Pakistan,Nepal, Sri Lanka etc.NEW HORIZONSRuchi Soya Industries Limited is exploring new horizons beyond its traditional businessinterests. New initiatives like palm plantation and renewable energy sources coagulatewell with the existing business goals of the company. They have expanded our crushingand refining capacities to remain competitive in the market.SCOPEAccording to the economic times report,Ruchi Soya — the countrys largest edible oil processing company – has been in the thickof action on the bourses. Appreciating by 360% in the past one year, the stock hasoutperformed the Sensex. Most of the action in the stock has occurred since July 2009.There have been a series of developments fuelling the rally in prices. Ruchi Soya hasbeen reporting steadily improving performance since the past three quarters against thesame periods in the previous year. The company, which is largely into processing of soyoil and soy products, has been on a capacity expansion drive.Recently, it signed a memorandum of understanding with the Ethiopian government forthe cultivation of soybean and processing facilities on 61,775 acres land on a lease basisfor 25 years.In a bid to diversify from soy oil, the company has planned capacity expansion for theproduction of palm and mustard oils. It is also looking at backward integration into palm
oil plantation, resulting in better margins.In January this year, the company acquired Gemini Edibles and Fats. This was followedby the acquisition of Andhra-based palm oil firm Palm Tech India in February. Thecompanys promoters recently hiked their stake in the company to 42.24% from 36.24%.C Sivasankaran-backed firms have also increased their stake from 6.87% to 9.52% inRuchi Soya. These developments further boosted investor confidence in the company.Notwithstanding the rally in the companys stock price, there is no scope for re-rating.The stock has only managed to recover most of the gains that were lost in 2008.Despite the efforts made by the company to diversify into high-value branded business, itfunctions as a trading company. The company earns an operating profit margin of 2-3%,much lower than its peers like KS Oil and JVLAgro industries .Trading at a price-to-earnings multiple of 15.4, the stock is fairly valued vis-à-vis itspeers. With most of the companys future plans and positive developments alreadyfactored in the price, the upside in the stock appears limited.OBJECTIVES- increased efficiencies from strategic resource allocation including rationalizingdistribution networks,- ability to maximize the brand values through increased scale as the largest edible oilscompany in India, and- ability to capitalize on market opportunities through a more professional, focused andcompetitive top management teamINVESTMENT HIGHLIGHTSFrom Supply chain to manufacturingWithfive standalone port based refiners,four standalone crushing plantsand five integrated crushing and refining plants, Ruchi Soya has redesignedits business model to increase the contribution of itsmanufacturing products to 76% from 33% in a period of 6 years. Currentlythe manufacturing products contributes 76% and the Company looksforward to increase the share of manufacturing products to 90% in a spanof another 2-3 years. Over a period of 5 years the company has made significantexpansion and a multifold increase in its refining and crushing capacitiesas a conscious move to redesign its business model.During the period of 6 yrs from 2002-2008, Ruchi had undertakensubstantial expansion plans for increasing its installed capacities to meet
the ever increasing demand.Ruchi has carved a niche for itself by creating a strong brandedportfolio. Currently focusing to capture the markets for healthand diet related pEDroducts.Refined Palm and Soya Oil manufactured byRuchi has a market share of 17% and 28% respectively. Its brand “Nutrela”has a market share of around 55% where as its second leading brand“Ruchi Gold” is having a market share of 60% and has grown at a CAGR of35% - 40% since its introduction. .Competitive Prices of Indian Soya meal in the globalmarkets places Ruchi in a sweet spot to capture the benefitof demand supply gap.The demand for soya meals is expected to increase significantly as thefeeding of livestock continues to expand, especially in rapidly developingcountries. Canada alone is expected to import $300 million ofsoymeal.Indian Soya meal is having wider consumer base in Internationalmarkets on account of various factors viz:Cheaper as compared to American or Brazilian Soya mealHas a high protein content of 48%.Only India supplies non genetically modified soya meal while othercountries manufactures genetically modified soya meal.As a result there is a growing demand of Indian soya mealfrom countries likeChina,Indonesia,Japan,Korea. •COMPANYS PRODUCTS PORTFOLIO 1.EDIBLE OIL: 2.Mahakosh oil:soyabean oil,sunflower oil,cottonseed,mustard 3.Ruchi gold:palmolein oil,mustardoil 4.Nutrela:soyumm oil ,mustard oil,sunflowere oil,groundnut oilB.VANASPATI: 5.Nutrigold:Formulatedafter extensiveR&D which has a grainy structure 6.Ruchi no 1:is hydrogenated vegetable fatC.SOYA FOODS:chunks ,granules,mini chunks,proflo flourSTRENGTHS: •Multifold increase in capacity over years.
Well-dispersed mix of proximity to raw materials and accessibility to the •markets through its crushing and refining units. •Has smartly moved from supply chain to manufacturing. •Has an efficient network of qualified and experienced operators andengineers. •Has built up a strong stable portfolio of brands.WEAKNESS: •Company’s raw materials are agro based and hence subject to volatilityin the national and international commodity markets.OPPURTUNITIES: •Foraying into other healthy food products under the brand Nutrela. •Strengthening its leadership in the branded edible oil segments. •Setting up of commodity exchanges have provided reasonableopportunities for the industry as well as the company to hedge andmanage the impact of price fluctuations.THREATS: •Exposed to foreign exchange risk on account of products which areimported and further processed before sales in the domestic markets. •Any change in Government policy with respect to edible oils /food itemscan have a major impact on the profits of the company. •The business is subject to many regulations by several authoritieswhich could have an adverse effect on companys business and theresults of operation.RESEARCH METHODOGY:PRIMARY:Ruchi soya industries was visited personally and theinformation was collected from the trusted authorities.SECONDARY:Other information was collected from thewebsites,magzines,newspaperslike economic times.