Ruchi Soya Industries Limited (RSIL), the flagship company of the Rs 11,000 crore Ruchi Group of Industries, the country’s largest manufacturer of soya food products is all set to strengthen its base in the edible oil market.
The company is also foraying into the steel business to cash in on the growing demand for value-added steel products market.
To begin with it would focus on south Indian market, from where the company expects major volumes in the future.
Two of its strongest brands, Nutrela and Ruchi Gold are category leaders. Nutrela, the biggest Soya foods brand in the country, enjoys more than 40 per cent of the market share. The products under this brand name include, chunks, granules, mini chunks and soya flour and the recently launched cooking oil, Nutrela Healthy Cooking Oil, the company claims, is India’s first vitamin enriched oils with Vitamins A, D and E.
Ruchi Gold’s market share in southern states ranges from 50 to 85 per cent. The brand has grown from 35 per cent to 40 per cent compound annual growth rate (CAGR) since its introduction.
With its recent launch of Nutrela Healthy Cooking Oil and the existing Ruchi Gold (launched in 1998), the company has devised innovative strategy in order to emphasise its presence in southern territory.
Brand positioning
The company has positioned its products - Nutrela Healthy Cooking Oil and Ruchi Gold — on two different platforms. For the Nutrela Healthy oil, the target customers are a niche one, the one who can afford a higher price. Nutrela Healthy Cooking oil, are manufactured in the premium light oils category, comes in three variants, soyabean, sunflower and mustard oil. Moreover, to add the flavour of glamour, the company has roped in actress Bhumika Chawla as the face of Nutrela Healthy Cooking Oils. She will endorse the brand through their print and television advertising created by Ogilvy & Mather. In selected metros, outdoor media campaign will be launched which will include branding of the Metro railway station of Delhi.
The company has positioned its products - Nutrela Healthy Cooking Oil and Ruchi Gold — on two different platforms. For the Nutrela Healthy oil, the target customers are a niche one, the one who can afford a higher price. Nutrela Healthy Cooking oil, are manufactured in the premium light oils category, comes in three variants, soyabean, sunflower and mustard oil. Moreover, to add the flavour of glamour, the company has roped in actress Bhumika Chawla as the face of Nutrela Healthy Cooking Oils. She will endorse the brand through their print and television advertising created by Ogilvy & Mather. In selected metros, outdoor media campaign will be launched which will include branding of the Metro railway station of Delhi.
On the other hand, Ruchi Gold, the market leader in the palmolien oil category, has been positioned at a more ‘aam aadmi’ (common man) platform. Branded as ‘as pure as 24 caret’, it claims to give the common man “more purity at a reasonable price”, according to Amrita Shahra, Head, Business Development, RSIL.
“We are using two different platforms — one is going to be the value for money option and the other is positioned on health grounds”, Ms Shahra opined.
Distribution network
Ruchi Gold has 80 per cent market share within refined palmolien oil category according to ORG February data and it is highest selling oil in consumer packs in South India. “RG is well distributed in metros, mini metros and class I-IV towns with a two pronged distribution network wherein we have brokers as well as dedicated distributors” she pointed.
Ruchi Gold has 80 per cent market share within refined palmolien oil category according to ORG February data and it is highest selling oil in consumer packs in South India. “RG is well distributed in metros, mini metros and class I-IV towns with a two pronged distribution network wherein we have brokers as well as dedicated distributors” she pointed.
The oil refineries are located in Patalganga (Maharashtra), Nagpur, Indore. Chennai, Mangalore with approximately 12.45 lakh MT per annum of refining capacity (Ruchi Soya and subsidaries) and total crushing capacity of approximately 12 lakh MT per annum.
There is a clear thrust on promoting soya foods in south India, where soya products are not yet popular. Traditionally, soya foods are more popular among north Indian. In a bid to cater to the south Indian palate, RSIL is coming up with customised soya flour, which will have the taste of south Indian dishes, for example, tastes of Idli and Dosa.
“In south India, we now see more acceptance of soya food. Hence, we have decided to offer certain south Indian taste masalas which will be suitable for south Indian plates.” says Ms Shahra.
“We intend to tap the healthy oils segment in sunflower oil. Since nationally Nutrela denotes health and nutrition, all the variants we will launch in this brand name will automatically connote health. We have also enriched it with Vitamins A, D and E, to make it the only oil in India which has been enriched with three Vitamins.
South India is a big market for sunflower oil and Ruchi Soya will indulge in major brand building there. Product will be available through 1,100 distributors, stockists, 1.5 lakh retailers etc. We have also tapped major super markets like Food Bazar, Spencer’s hyper market.”, Ms Shahra told Deccan Herald.
According to Dinesh Shahra, Managing Director, Ruchi Soya “The industry will also be in better shape due to removal of excise duties and VAT implementation, which will help consolidation and better margins to organised players. Higher customs duties on imported raw material will also discourage imports, which will lead to more domestic production and encourage farmers to grow more crop and help get better realisation.”
The company is also bullish on the industry with improved domestic crop production, consumption is expected to increase due to lowered prices to consumers. Also due to the government’s intention to implement the packaging control order, consumers will have a packed, hygienic oil which will ensure health safety.
“The edible oils branded sector is growing approximately at a rate of 20 per cent per annum and Ruchi plans to grow at a much faster pace. Already, around than 1/4 of its turnover comes from branded sales of oils, vanaspati and soya foods. Also, last year our bottom line growth far exceeded our top line growth and this trend is likely to continue the coming year as well”, Mr Shahra added.
Steel forayMeanwhile, Riding on the steel wave, the Ruchi Group is close to commissioning its new steel processing unit near Gandhi Dham in Kutch district of Gujarat. The Greenfield project, will be commissioned by Indian Steel Corporation, a group company, with an investment to the tune of Rs 580 crore.
With this project, Ruchi Group will add a fresh capacity of half a million tonnes to its processing capacity. The plant will produce cold rolled, galvanised and galvalum steel products.
“With increasing activity in the Indian auto sector and sustained buoyancy in the construction segment, we are bullish on Indian domestic demand”, Mr. Umesh Shahra, Managing Director - Ruchi Group, commented.
The plant is likely to benefit from cheaper imports of the raw material due to its proximity with the port. The plant is likely to start trial production by mid July 2005. Sales may take a couple of months more to commence.
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