N V Vijayakumar, Bengaluru, DH News Service, Sep 28 2017, 14:22 IST
According to the MOU, Ruchi Soya would use its own extensive distribution network to sell the complete range of Patanjali edible oils in large packs across all regions of India. Image courtesy: Twitter
Ruchi Soya Industries Limited, one of the leading agriculture and food FMCG company with a turnover of $3 billion, on Friday signed an MOU with Patanjali Ayurved Ltd for an exclusive sales and distribution arrangement for the entire range of Patanjali edible oils in large packs.
According to the MOU, Ruchi Soya would use its own extensive distribution network to sell the complete range of Patanjali edible oils in large packs across all regions of India.
Commenting on the exclusive arrangement, Ruchi Soya Industries Ltd Managing Director & CEO Dinesh Shahra said the company welcomes this expansion of its relationship with Patanjali Ayurved.
"The MOU for exclusive distribution of large packs with Patanjali Ayurved is a testimony to the intrinsic strength of our distribution network and success of the manufacturing and packaging arrangement between the organisations. Not only will Ruchi Soya’s widespread distribution network ensure availability and sales of Patanjali’s large packs range; this agreement will further lead to better utilisation of Ruchi’s manufacturing capacity and significantly contribute to cost-efficient operations and augment profitability," said Shahra.
Besides owning more than 10 lakh outlets across 4000 towns in general trade, Ruchi Soya also has its extensive coverage of modern trade outlets, institutions and the Horeca (Hotel/Restaurant/Catering) segment.
According to Yoga Guru Baba Ramdev promoted Patanjali Ayurved Ltd sources, the company is eyeing sales of Rs 20,000 cr by 2020 from its edible oils range of which large packs will constitute a substantial portion.
Ruchi Soya Industries Limited is number one position in soy foods category in India. It also one of the largest players in the cooking oils segment of the country. Its leading brands include Nutrela, Mahakosh, Sunrich, Ruchi Gold and Ruchi Star.
The BSE listed company reported a net loss of Rs 286.24 crore in Q1 June 2017 as against net profit of Rs 1.03 crore in Q1 June 2016. Net sales declined 34.1% to Rs 3261.21 crore in Q1 June 2017 over Q1 June 2016.
Ruchi Soya was recently in the news as one among the 30-40 defaulters in the second list the RBI sent to banks, asking them to conclude a debt resolution process by December 13 this year.
The company's board recently set up a committee to explore business restructuring options. Analysts view the move will help the company's individual business verticals can look for investors and business partnerships.
"Th move will help the company to overcome the hurdles developed over a period of time due to macroeconomic conditions. As per the company's annual report, Ruchi Soya’s total borrowings stood at Rs12,232.22 crore for FY16-17," says the analyst.