Mumbai: Edible oil processing firm Ruchi Soya Industries Ltd has signed a three-year pact to refine and package edible oils for yoga guru Baba Ramdev’s packaged consumer goods company Patanjali Ayurved Ltd.
In a statement on Monday, the company said the agreement covers processing and packaging soya, sunflower and mustard oils for Patanjali.
“The agreement with Patanjali Ayurved is a win-win situation,” Dinesh Sharma, Ruchi Soya’s managing director, said in the statement. “We will be able to utilize idle capacities, and work with Patanjali to enable them to supply quality refined oils to the Indian market.”
Ruchi Soya has 19 edible oil manufacturing facilities in India, of which 13 facilities are engaged in edible oil refining, according to data from its FY15-16 annual report.
Patanjali launched its line of edible oils in January this year.
The edible oil market in India is currently worth Rs 50,000-70,000 crore, according to an analyst at an equities research firm who requested anonymity.
“It’s a very scattered market and only 20-25% of it is the branded refined oil market”, he said.
According to a July 2016 report by CARE Ratings, India accounts for 10-12% of the world’s edible oil consumption, but a considerable supply-demand gap exits. In oil year 2014-15 (from November 2014 to October 2015), India had a 67.33% gap in edible oil production and consumption, according to CARE. “Majority of the demand-supply gap of edible oil in India is being filled through imports”, the report said.
Shares of Ruchi Soya closed 16.34% higher at Rs. 29.90 at the end of the day’s trading. The BSE’s benchmark Sensex edged up 0.06% to 28,351.62 points