Chapter - 2

Company Profile

2.1 History and Company Profile of Ruchi Soya Industries

2.2 FMCG Companies In India

2. Edible Oil Company In India

2.4 Future Of Edible Oil Company In India

2.1 History and Company Profile of Ruchi Soya Industries
Edible oils constitute an important component of food expenditure in Indian households.
Historically, India has been a major importer of edible oils with almost 30-40% of its
requirements being imported till 1980s. In 1986, the Government of India established the
Technology Mission on Oilseeds and Pulses (TMOP) in order to enhance the production of
oilseeds in the country. The TMOP launched special initiatives on several critical fronts such as
improvement of oilseed production and processing technology; additional support to oilseed
farmers and processors besides enhanced customs duty on the import of edible oils.
Consequently, there was a significant increase in oilseeds area, production, and yields until the
late-1990s. However, in order to fulfill its obligations towards various international trade
agreements and also meet the increasing demand-supply deficits, India began to reduce import
restrictions on edible oils in the late 1990s; and it was gradually brought under Open General
License. This led to a significant slump in the domestic oil seeds market, as edible oil prices fell
sharply in line with the low international prices prevailing at that time. Subsequently, the duty
structure was modified so as to maintain a duty differential between crude and refined varieties
in order to protect the domestic industry. Nevertheless, due to high import dependence, domestic
edible oil prices remain highly correlated to international edible oil price movement, and this has
resulted in volatility in the key credit metrics of rated edible oil companies. At the same time,
ICRA notes that edible oil companies with benefits of large-scale integrated operations, multi-
product offerings and recognizable branded presence in retail markets have fared better as
compared to small/medium-scale domestic oilseed crushers.

Ruchi Soya Industries LTD.

The Company was incorporated on 6th January, 1986. It was promoted by General goods Pvt.
Ltd. and Ruchi Pvt. Ltd; of the Shahra Group of Industries. It manufactures Soya proteins,
Specialty Soya products, Soya snack foods and Nutrela. In 1999, it launched Ruchi Sona and
Ruchi Star. Its composite unit at Mangalore comprising refinery, vanaspati, and textured
vegetable protein plants commenced operation in 2002. Aneja Solvex Pvt Ltd became its wholly
owned subsidiary in Jan 2004.

Ruchi Soya operates in extractions, vanaspati, oils and others segments. It undertakes all types of
seed extractions, textured soya protein and soya flour. It also deals in gram, wheat, rice, maize,
shorgum and other seeds in others. Its plants are located at Indore in MP, Haldia in WB,
Mangalore in Karnataka and Raigad in Maharashtra. Some of its brands include Nutrela (soya
products and healthy oils), Ruchi Gold (palmolein, sunflower, and mustard oil), Soyumm
(refined soyabean oil), Sunrich (refined sunflower oil) and Mandap (refined mustard oil). In
FY05, it set up new plants in Nagpur, Maharashtra and Shujalpur in MP, taking the total number
of plants to six. It also commissioned a wind power turbine having a capacity of 1.25 MW in
MP. Its export revenue grew 139.6% y-o-y in FY05. Of its total revenue, extractions accounted
for 19%, vanaspati constituted 7.7%, oils comprised 70.3% and others accounted for the rest. In
FY05, Ruchi Soya launched healthy oils Nutrela refined sunflower and soyabean oils, enriched
with Vitamins A, D and E.
Featuring among the top five FMCG players in India, with a turnover crossing Rs. 13,000 crores,
Ruchi Soya Industries Limited is the flagship company of Ruchi Group of Industries. 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 lecithin from India. Nutrela (soya chunks,
granules and soya flour) is the largest selling soya foods brand in the country.

Ruchi is a leading branded edible oil supplier. Nutrela Soyumm (Soyabean Oil), Ruchi Gold
(Palmolein Oil), Mahakosh, Sunrich (Sunflower Oil) and Mandap (Mustard Oil) and new healthy
oil variants like Nutrela Vitamin Sunflower oil and Nutrela Groundnut oil make Nutrela a trusted
option in edible oils.

Superior procurement and trading skills, continuous innovation, an endeavor to meet consumer
needs and stringent quality control standards have enabled Ruchi to emerge as a 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) and Delhi
Stock Exchange.

2.1.2 Company Details

Registered office
408, Tulsiani Chambers
Nariman Point
Mumbai - 400021
Maharashtra

Chairperson
K Shahra

Managing Director
D Shahra

Directors
P D Nagar, P S Santhanakrishnan,
S P Joshi, A B Rao

Company Secretary
R L Gupta

Bankers
UTI Bank, United Bank, BoM, Syndicate,
SB Indore, SBS, SBBJ, SBH, SBT,
SB Mysore, SB Patiala, Dena, OBC, BoR, PNB, BoI, CorpnBank, Canara, UCO, SIB, KVB,
Vijaya Bank, AB

Auditors
P D Kunte & Co

2.1.3 THE SOYA REVOLUTION

Soybeans are native to Northeastern Asia and were first introduced into the United States in 1765
(Soybean Research Advisory Institute). With the majority of cultivation located in the
Midwestern and southern United States, the United States produces about 3 billion bushels a
year, and soybeans are the second most valuable crop in the United States behind corn (Soybean
Research Advisory Institute). For many years the United States reigned as the world’s largest
producer of soybeans and the major soybean supplier to the world export market, but production
in South American has brought that area to the forefront of the soybean export market, including
soybean products.

In early 1960s Mr. Mahadeo Shahra created awareness on the potential of soya crop amongst the
farmers in the state of Madhya Pradesh in India. He was instrumental in bringing up a small
green revolution in the state, by introducing and encouraging soyabean cultivation on a
commercial scale. Shahra family was in the business of commodities trading and subsequently
entered the business of ginning and oil milling. The family's efforts, along with that of the others,
resulted in soya revolution in Madhya Pradesh. Today Madhya Pradesh is considered as Soya
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 foods and
processed foods categories. This is largely due to its strict adherence to quality and continuous
innovation to keep with the times. Also, Ruchi has evolved from being a large manufacturing
firm to a respected brand, keeping in line with the FMCG players. Its Nutrela and Ruchi Gold
brands have captured leading positions in the soya foods and edible oils categories respectively.
Ruchi has also ventured into other businesses like bakery specialties, where it foresees a big
potential for growth. With its innate manufacturing and logistics advantages, and its foray into
the branded sector, one only sees immense potential for the growth of Ruchi in the future.
Soyabean is one of the most important agro based product which has commercial value after rice,
wheat, maize etc. It is generally cultivated in the tempered region with water availability. It is
generally matured in the month of November. Soyabean oil has commercial value in the field of
vegetable oil. Soyabean oil can be extracted from soyabean by solvent extraction process. All of
the soyabean products, due to its high nutritive value and protein content, is becoming more and
more common in the daily diet of Indian population. It is widely consumed by household, hotel
and restaurants, international and boarding places and by many other sectors. The main popular
products from soyabean are soyabean oil, soyabean milk and soya paneer, soyabean extract, oil
cake etc. Due to its high nutritive value and moderate price the demand of soyabean right now
are increasing immensely
2.1.4 BRANDS
Over the years, Ruchi Soya Industries Limited has grown to become a multi-million US Dollar
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 market share. It has
enjoyed the trust of consumers for last 24 years now, and continues to expand its range to cater
to varying needs of its consumers. It has become generic to the soya category. We have
effortlessly strived to educate people about health and goodness of 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 acceptability and
acclaim from the people. Ruchi Gold is the leader in the palmoline category. As a part of
packaged goods thrust, Ruchi Gold was introduced in Chennai. Today, it enjoys leadership
position in branded palmoline oil category.

Mahakosh Refined Soyabean Oil is known for its purity and premium taste, its nutritional
qualities enhance its health quotient. It contains fats that may help in reducing serum cholesterol
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 to strive 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 also
ventured into bakery and special fats category.

2.1.5 MARKETING STRENGTHS

The extensive distribution network, built over the years, is a major strength for Ruchi Soya
Industries Limited. Catering nationally through over 6.25 Lac retail stores, with 96 Company
depots, over 3200 distributors and a sales staff of over 200, Ruchi has attempted to penetrate
depth wise, along with opening new markets. With its emphasis on providing value goods to
consumers, dual strategy of Ruchi on popular and premium range works well. ‘Ruchi Gold’ and
‘Sunrich’ are our value for money offering but with no compromise in quality. This positioning
helps generate large sales volumes for the products. Our Nutrela series is more premium, and
offers healthy options in soya foods and edible oils. This dual strategy is based on our cultivated
understanding of the Indian consumer psyche.

With undivided focus on new channels of distribution, we have a firm footing in modern retail
and prestigious hotel chains. With our alliances with players like Pantaloon and visible presence
in all leading national and regional supermarkets, we hope to grow our consumer base and
product portfolio.
2.1.6 EXPORTS
Ruchi Soya Industries Limited is the Flagship Company of Ruchi Group, a pioneer soya
processor group, which started operating back in 1972-73 and is the first exporter of Soyabean
Meal from India. Over the years, Ruchi has become one of the largest crushers of soyabean in
India and presently has installed crushing capacity of about 4.1 million tons 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 Meal accounting 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 solvent extraction process. Soyabean meal is considered
as one of the most valuable raw material for preparing poultry / aqua / animal feed in the world
market as it contains a very high percentage 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 soyabean meal
which is in high demand particularly by the quality feed producers in South East Asia, Far East
and Middle East markets.

Besides, Ruchi is also able to export high end value added products like edible de-fatted soya
flour, full fatted edible flour, soya lecithin, soya granules, soya flakes and soya chunks etc.

All the products produced by Ruchi enjoy ready accessibility in the export market namely, Japan,
Vietnam , Indonesia, Thailand, Philippines, South Korea, Taiwan, Middle East countries apart
from Indian Sub continent countries namely Bangladesh, Pakistan, Nepal, Sri Lanka etc.

2.1.7 NEW HORIZONS

Ruchi Soya Industries Limited is exploring new horizons beyond its traditional business
interests. New initiatives like palm plantation and renewable energy sources coagulate well with
the existing business goals of the company. We have expanded our crushing and refining
capacities to remain competitive in the market. Our recent acquisitions and mergers will help us
to accelerate our pace of growth.

2.1.8 PALM PLANTATION

Indian edible oil market is the world’s fourth largest after USA, China and Brazil. A growing
population with increasing rate of consumption and continuously increasing per capita income
are some of the factors accelerating the demand for edible oil in India. This has lead to increased
dependence on import of palm oil. To tackle this situation, Government of India has formed an
expert committee which has identified suitable land for palm plantation all over India.
Palm plantation has multiple benefits as it has yield and income per hectare are better than other
oil seed crops. Once planted, palm trees can be harvested for about 25 years. Reduced
dependency on imports conserves country’s foreign exchange reserves and needless to state -
Plantations are always environmentally beneficial.

Ruchi has taken the initiative and consolidated its palm plantation activities, by merging ‘Mac
Oil Palm Limited’ and ‘Palm Tech India Limited’ into Ruchi Soya Industries Limited. Ruchi has
acquired contract farming access to a total land bank of 1,69,000 ha, a 60 tph oil mill capacity for
FFB processing and 15 nurseries. Ruchi has palm plantations in Andhra Pradesh, Karnataka,
Mizoram, Gujarat, Orissa and Tamil Nadu.

2.1.9 GREEN ENERGY

In 2006 Ruchi Soya industries Limited ventured into the field of generating feed stock for bio-
diesel through Jatropha plantation. It has completed plantation of about 60,000 acres in Madhya
Pradesh, Maharashtra and Andhra Pradesh through various farmer-friendly models.

To tap more opportunities in this field Ruchi has formed a Limited Liability Partnership (a
corporate business vehicle) called Indian Oil Ruchi Bio-Fuels LLP in association with Indian Oil
Corporation Ltd. for Jatropha plantation on Government wasteland in Jhansi and Lalitpur
districts. The LLP would carry out plantation on 50,000 ha of wasteland available in Jhansi,
Lalitpur and adjoining districts in a phased manner and will establish bio-diesel production plant
of 300 TPD capacity by 2014 to provide an alternate fuel option. Uttar Pradesh has about 10 lacs
ha of waste land on which Jatropha can be planted. Jatropha seeds contain 30% oil, which can
be extracted and processed into bio-diesel.

Ruchi Soya Industries Limited is active in wind power generation, having wind mill installations
in Madhya Pradesh, Tamil Nadu, Maharashtra, Gujarat and Rajasthan with an aggregate capacity
of 59.10 MWh as of the end of last financial year.

Rural integration is the key business philosophy of Ruchi, thereby, continuing the tradition of
being a farmer friendly company. We believe that effective utilization of uncovered
waste/marginal land of the country will lead to inclusive growth by generating large scale rural
employment opportunities.

2.1.10 CAPACITY ENCHANCEMENT

Ruchi Soya Industries Limited has expanded its refining and crushing capacities. Ruchi now
has over 2.2 million metric tons per anum of refining and over 4.1 million metric tons per
anum of crushing capacities, spread over strategic locations across India.

We are one of the few edible oil companies in the country that has a balanced mix of inland
and port based refineries. This enables us to optimize production depending upon the
availability of various alternatives – local oilseeds or imported crude oil. Moreover, multi-
 location refineries have reduced road travel costs leading to significant transportation cost
advantage. We have 5 refineries at various locations and 12 inland crushing plants out of
which most are attached with refinery.

2.1.11 MARGERS & ACQUISITION

Ruchi Soya Industries Limited consolidated its position in palm plantation activities by merging
Mac Oil Palm Limited and Palm Tech India Limited. This consolidation will enable Ruchi to
sustain its leadership and have a formidable presence in the southern markets of India both in
terms of sourcing and marketing. Also the investment of resources will prove beneficial for the
rural development and agricultural economy in Andhra Pradesh and Karnataka. Merger of Mac
Oil and Palm Tech with Ruchi will support overall initiatives of promotion, development and
processing of oil palm plantations in India and contribute towards reduced dependency on edible
oil imports in the long run.

Ruchi has set up a wholly owned subsidiary in the name of Ruchi Industries Pte. Ltd. in
Singapore and Ruchi Ethiopia Holding Ltd. in Dubai for investing in plantation activities outside
India.

The Board has approved a Scheme of Amalgamation and Arrangement of Sunshine Oleochem
Limited with the Company subject to approval of members, creditors and jurisdictional High
Court.

Earlier Ruchi had merged its sister concerns Aneja Solvex Ltd, General Foods Ltd, Ruchi Credit
Corporation, Ruchi Health Foods Ltd, Param Ind. Ltd, Ruchi Private Ltd and soya businesses of
MP Glychem.

2.1.12 AWARDS

Ruchi Soya Industries Limited has been the recipient of many prestigious awards, from leading
organisations like Dun and Bradstreet, Globoil and many more Some of the prestigious
Excellence awards won by RUCHI SOYA INDUSTRIES LIMITED are as under :
LIST OF AWARDS RECEIVED

National Energy Conservation Award (Second Prize) to its Manglore

2009
(Karnataka) plant in Edible Oil/Vanaspati Industry
National Energy Conservation Award (first prize) to its Kandla
2008
(Gujarat) plant in Edible Oil/Vanaspati Industry
National Energy Conservation Award (second prize)to its Chennai
2008
plant in Edible Oil/Vanaspati Industry
National Energy Conservation Award (first prize) to its Thiruvallur
2007
(Chennai) plant in Edible Oil/Vanaspati Industry
Dun and Bradstreet – Rolta Corporation Award-2008 2009
Dun and Bradstreet Award for the No. 1 food processing company of
2006
India.
Source – Ruci Soya Industries Year Book
From GLOBOIL India, Mumbai : GLOBOIL GOLD award for outstanding
Performance in category of :
Energy Conservation Award 2009
Outstanding performance for a decade in Import of Edible Oil 2009
Outstanding performance for a decade in Export of Oil meal 2009
Source – Ruchi Soya Industries Year Book
GLOBOIL DIAMOND AWARD
Golboil India Man of the year Awarded to Mr. Nitesh Shahra 2010
Highest Importer of Edible Oil 2010
Highest Exporter of Oilmeals 2010
Importer of Edible Oil 2009
Exporter of Oilmeals 2009
Highest Importer of Edible Oil 2008
Highest Export of Oilmeals 2008
Globoil Woman Enterpreneur of the year Awarded to Ms. Amrita
2008
Shahra

From GLOBOIL India, Mumbai :

GLOBOIL GOLD AWARD FOR OUTSTANDING PERFORMANCE IN THE
CATEGORY OF :
200
Highest Exporter of Oil Meals
6
200
Highest Exporter of Oil Meals
4
From Dun and Bradstreet

Dun and Bradstreet Award 2006

FROM THE SOYABEAN PROCESSORS' ASSOCIATION OF INDIA, INDORE
:

1st Highest Exporter as Manufacturer Exporter

2004-2005
1st Highest Processor 2004-2005

1st Highest Seller of Soy Oil in Consumer Pack

2004-2005
1st Certificate of Merit for Highest sale of textured vegetable
2004-2005
protein (Soy Nuggets)

1st Certificate of Merit for Highest Sale of Lecithin

2004-2005
2nd Highest Exporter as Manufacturer Exporter 2003-2004
1st Highest Processor 2003-2004
1st Highest Seller of Soya Oil in Consumer Pack 2003-2004
1st Certificate of Merit for Highest Sales of Textured Vegetable
2003-2004
Protein (Soy Nuggets)
2nd Certificate of Merit for Highest Sales of Lecithin 2003-2004
1st Highest Exporter as Manufacturer Exporter 2002-2003
1st Highest Processor 2002-2003

1st Highest Seller of Soya Oil in Consumer Pack

2002-2003
1st Certificate of Merit for Highest Sale of Textured Vegetable
Protein (Soy Nuggets) 2002-2003

1st Certificate of Merit for Highest Sale of Lecithin

2002-2003
1st Certificate of Merit for Manufacturing Maximum Number of
2002-2003
Value Added Products

1st Highest Exporter as Manufacturer Exporter

2001-2002
1st Highest Processor (Private Sector) 2001-2002
2nd Highest Sales of Soya Oil in Consumer Pack 2001-2002
1st Certificate of Merit for Highest Sales of Textured Vegetable
2001-2002
Protein
1st Certificate of Merit for Highest Sales of Lecithin 2001-2002
Certificate of Merit for Manufacturing Maximum Number of
2001-2002
Value Added Products
1st Highest processor (Private Sector) 2000-2001
1st Certificate of Merit for Highest sales of Textured Vegetable
2000-2001
Protein
1st Highest Manufacturer Exporter 2000-2001
1st Highest Manufacturer Exporter (Private Sector) 1999-2000
1st Highest processor (Private Sector) 1999-2000
1st Certificate of Merit for Highest sales of Textured Vegetable
1999-2000
Protein
1st Certificate of Merit for Highest sales of Soya Lecithin 1999-2000
1st Highest Manufacturer Exporter (Private Sector) 1998-1999
1st Highest processor (Private Sector) 1998-1999
1st Certificate of Merit for Highest sales of Textured Vegetable
1998-1999
Protein
1st Certificate of Merit for Highest salex of Soya Lecithin 1998-1999
1st Highest Manufacturer Exporter (Private Sector) 1998-1999
1st Highest Manufacturer Exporter (Private Sector) 1997-1998
1st Highest processor (Private Sector) 1997-1998
1st Certificate of Merit for Highest sales of Textured Vegetable
1997-1998
Protein
1st Certificate of Merit for Highest sale of Soya Lecithin 1997-1998
1st Highest Manufacturer Exporter (Private Sector) 1996-1997
1st Highest processor (Private Sector) 1996-1997
1st Certificate of Merit for Highest sales of Textured Vegetable
1996-1997
Protein
 200
Highest Exporter of Oil Meals
3
200
Highest Exporter of Oil Meals
0
199
Highest Exporter of Oil Meals
9
199
Highest Exporter of Oil Meals
8
200
Highest Importer of Edible Oil
6
200
Highest Importer of Edible Oil
3
199
Highest Importer of Edible Oil
8

Source - Ruchi Year Books

Mr. Dinesh Shahra, Managing Director of the Company was awarded ‘Oil Man of the
year 2000’ by Globoil India, Mumbai. Mr. Kailash Shahra, Chairman of the Company was
awarded “Legend of the year 2003” by Globoil, Mumbai, Shri Dinesh Shahra, Managing
Director of the Company was awarded “Globoil Man Of The Decade Award in the year 2006.
 2.1.14 Financial OF Ruchi Soya Industry

Source: Ruchi Soya Industry Year Book. 2011-2012

Notes

1) Revaluation Reserve of ` 7.05 crore has been included while calculating Net worth for the year ended
2009-10, 2010-11 and 2011-12.
2) Total borrowings are net of borrowings backed by "xed deposits with banks.
3) The Company has sub-divided each equity share of ` 10/- into "ve equity shares of ` 2/- each during
the year 2007-08. Therefore, the key indicators as mentioned above for the year 2007-08 are not
comparable with those of earlier years.
4) Book value, earning and turnover per share has been computed on weighted average number of equity
shares outstanding at the end of the year.
5) Previous years’ "gures have been regrouped, wherever necessary.
2.1.15 Balance Sheet
Source: Ruchi Soya Industry Year Book 2011-2012
2.1.16 Statement of Profit and Loss

Source: Ruchi Soya Industry Year Book 2011-2012

2.1.17Cash Flow Statement
 Source: Ruchi Soya Industry Year book 2011-2012

2.1.18 Brands
Ruchi's wide range of food products include healthy cooking oils, nutritional soya foods, top grade
vanaspati and bakery fats. Ruchi is the undisputed market leader in the edible oils, as well as soya foods
categories. The edible oil range includes many top brands like Mahakosh Soyabean oil, Ruchi Gold
Palmolein and Sunrich sunflower oil. Nutrela is the largest selling soya foods brand in the country, with
more than 50% market share. Nutrigold and Ruchi No. 1 vanaspati are regional leaders in their
respective categories.

REFINED SOYABEAN OIL

Features: A brand synonymous with purity and premium taste, this transparent cooking oil is full of
nutritional qualities. The natural taste of soyabean oil enhances the flavour of food without
masking the taste of other ingredients.

Health Benefits: It contains both polyunsaturated and monounsaturated fats which have been known to
reduce serum cholesterol levels. Omega-3 fatty acids present in soyabean oil offer
protection against heart-related diseases

Available in 500 ml, 1lt, 5 lts and 15 lts and 15 Kg. packs.
REFINED COTTON SEED OIL

Features: Mahakosh refined cottonseed oil is ideal for frying and cooking all sort of dishes. This
oil has high smoke point & it provides long shelf life to the finished product.

Health Benefits: Excellent oil for cooking and frying purposes, particularly chips and other snack
foods.

Available in 1lt, 5 lts and 15 lts and 15 Kg. packs.

FILTERED GROUNDNUT OIL

Features: Groundnut oil has a high smoke point so it is an excellent choice for sautéing and frying.

Health Benefits: •It is also high in monounsaturated and polyunsaturated fats, which it a healthy oil
to use for cooking or as a base for dressings.
• Consumers prefer groundnut oil for its nutty flavor & taste

Available in 1 Ltr. & 5 Ltr. and 15 Ltr and 15 Kg

 2.2 FMCG Companies In India

Products which have a quick turnover, and relatively low cost are known as Fast Moving
Consumer Goods (FMCG). FMCG products are those that get replaced within a year. Examples
of FMCG generally include a wide range of frequently purchased consumer products such as
toiletries, soap, cosmetics, tooth cleaning products, shaving products and detergents, as well as
other non-durables such as glassware, bulbs, batteries, paper products, and plastic goods. FMCG
may also include pharmaceuticals, consumer electronics, packaged food products, soft drinks,
tissue paper, and chocolate bars.

A subset of FMCGs are Fast Moving Consumer Electronics which include innovative electronic
products such as mobile phones, MP3 players, digital cameras, GPS Systems and Laptops. These
are replaced more frequently than other electronic products.

White goods in FMCG refer to household electronic items such as Refrigerators, T.Vs, Music
Systems, etc.

In 2005, the Rs. 48,000-crore FMCG segment was one of the fast growing industries in India.
According to the AC Nielsen India study, the industry grew 5.3% in value between 2004 and
2005.

2.2.1 Indian FMCG Sector

The Indian FMCG sector is the fourth largest in the economy and has a market size of US$13.1 billion.
Well-established distribution networks, as well as intense competition between the organized and
unorganized segments are the characteristics of this sector. FMCG in India has a strong and competitive
MNC presence across the entire value chain. It has been predicted that the FMCG market will reach to
US$ 33.4 billion in 2015 from US $ billion 11.6 in 2003. The middle class and the rural segments of the
Indian population are the most promising market for FMCG, and give brand makers the opportunity to
convert them to branded products. Most of the product categories like jams, toothpaste, skin care,
shampoos, etc, in India, have low per capita consumption as well as low penetration level, but the
potential for growth is huge.

The Indian Economy is surging ahead by leaps and bounds, keeping pace with rapid urbanization,
increased literacy levels, and rising per capita income.

The big firms are growing bigger and small-time companies are catching up as well. According to the
study conducted by AC Nielsen, 62 of the top 100 brands are owned by MNCs, and the balance by
Indian companies. Fifteen companies own these 62 brands, and 27 of these are owned by Hindustan
Lever. Pepsi is at number three followed by Thums Up. Britannia takes the fifth place, followed by
Colgate (6), Nirma (7), Coca-Cola (8) and Parle (9). These are figures the soft drink and cigarette
companies have always shied away from revealing. Personal care, cigarettes, and soft drinks are the
three biggest categories in FMCG. Between them, they account for 35 of the top 100 brands.

Exhibit I
THE TOP 10 COMPANIES IN FMCG SECTOR

S. NO. Companies
1. Hindustan Unilever Ltd.
2. ITC (Indian Tobacco Company)
3. Nestlé India
4. GCMMF (AMUL)
5. Dabur India
6. Asian Paints (India)
7. Cadbury India
8. Britannia Industries
9. Procter & Gamble Hygiene and Health Care
10. Marico Industries

Source: Naukrihub.com

The companies mentioned in Exhibit I, are the leaders in their respective sectors. The personal care
category has the largest number of brands, i.e., 21, inclusive of Lux, Lifebuoy, Fair and Lovely, Vicks,
and Ponds. There are 11 HLL brands in the 21, aggregating Rs. 3,799 crore or 54% of the personal care
category. Cigarettes account for 17% of the top 100 FMCG sales, and just below the personal care
category. ITC alone accounts for 60% volume market share and 70% by value of all filter cigarettes in
India.

The foods category in FMCG is gaining popularity with a swing of launches by HLL, ITC, Godrej, and
others. This category has 18 major brands, aggregating Rs. 4,637 crore. Nestle and Amul slug it out in
the powders segment. The food category has also seen innovations like softies in ice creams, chapattis
by HLL, ready to eat rice by HLL and pizzas by both GCMMF and Godrej Pillsbury. This category
seems to have faster development than the stagnating personal care category. Amul, India's largest foods
company, has a good presence in the food category with its ice-creams, curd, milk, butter, cheese, and so
on. Britannia also ranks in the top 100 FMCG brands, dominates the biscuits category and has launched
a series of products at various prices.

In the household care category (like mosquito repellents), Godrej and Reckitt are two players.
Goodknight from Godrej, is worth above Rs 217 crore, followed by Reckitt's Mortein at Rs 149 crore. In
the shampoo category, HLL's Clinic and Sunsilk make it to the top 100, although P&G's Head and
Shoulders and Pantene are also trying hard to be positioned on top. Clinic is nearly double the size of
Sunsilk.

Dabur is among the top five FMCG companies in India and is a herbal specialist. With a turnover of Rs.
19 billion (approx. US$ 420 million) in 2005-2006, Dabur has brands like Dabur Amla, Dabur
Chyawanprash, Vatika, Hajmola and Real. Asian Paints is enjoying a formidable presence in the Indian
sub-continent, Southeast Asia, Far East, Middle East, South Pacific, Caribbean, Africa and Europe.
Asian Paints is India's largest paint company, with a turnover of Rs.22.6 billion (around USD 513
million). Forbes Global magazine, USA, ranked Asian Paints among the 200 Best Small Companies in
the World

Cadbury India is the market leader in the chocolate confectionery market with a 70% market share and
is ranked number two in the total food drinks market. Its popular brands include Cadbury's Dairy Milk, 5
Star, Eclairs, and Gems. The Rs.15.6 billion (USD 380 Million) Marico is a leading Indian group in
consumer products and services in the Global Beauty and Wellness space.

Outlook

There is a huge growth potential for all the FMCG companies as the per capita consumption of almost
all products in the country is amongst the lowest in the world. Again the demand or prospect could be
increased further if these companies can change the consumer's mindset and offer new generation
products. Earlier, Indian consumers were using non-branded apparel, but today, clothes of different
brands are available and the same consumers are willing to pay more for branded quality clothes. It's the
quality, promotion and innovation of products, which can drive many sectors.

2. 3 Edible Oil Company In India

India is one of the largest producer of oilseeds in the world and this sector occupies an important
position in the agricultural economy . Oilseeds and edible oils are two of the most sensitive
essential commodities. India grows oilseeds on an area of over 26 million hectares, with
productivity of around 1000 kg a hectare. But self –reliance in edible oils is not in sight and the
country imports almost half of its edible oil requirements.

India has a wide range of oilseeds crops grown in its different agro climatic zones. Groundnut,
mustard/rapeseed, sesame, safflower, linseed, nigerseed/castor are the major traditionally
cultivated oilseeds. Soyabean and sunflower have also assumed importance in recent years.
Coconut is most important amongst the plantation crops. Among the non-conventional oils,
ricebran oil and cottonseed oil are the most important. The Indian edible oil industry is composed
of some 15,000 oil mills, 600 solvent extraction units, 250 vanaspati units and about 400 refining
units.

The National council of Applied Economic Research has projected the demand for edible oils
under three scenarios on the basis of per capita income growing annually by 4%,5% and
6%.Under the low growth scenario, the demand was to rise to 22.8 million tones ,under medium
growth scenario to 25.9 million tones and under high growth scenario to 29.4 million tones in the
near future. The edible oil industry is largely dominated by the bulk segment. Unbranded
segment accounts for anywhere between 80 and 90% of the total consumption. Imports are
taking place in two forms-refined and crude oil. A large part of the crude oil gets sold as
unbranded oil. The share of raw oil, refined oil and vanaspati in the total edible oil market is
estimated at 35%, 55% and 10% respectively.

With growing quality consciousness and plummeting price differences between packaged and
non-packaged edible oils, the packaged edible oil sector will capture 50% of the market share in
coming years. The packaged branded edible oil industry is growing at 12% annually. Major
Players like Marico Industries is the market leader with its two main brands, Sweekar and
Saffola, having 15% market share, followed by ITC Agrotech’s Sundrop at 13%. Godrej Foods
has a market share of 11% and HLL’s Flora has 3%. Cargil sells edible oil through Nature Fresh
and Gemini brands, Ruchi groups with Ruchi Gold and Mahakosh oil,Adani Wilmar Limited,
owner of Fortune brand, National Diary Development Board's Dhara brand and other small
players own rest of the packaged edible oil market.

2.3.1 Top Edible Oil Companies in India

% Gross Net Total

Company Name Last Price CWIP
Chg Block Block Assets
-
Ruchi Soya 87.5 0.74 2,809.23 2,104.96 229.95 5,623.64
-
KS Oils 5.3 1.67 1,256.52 1,064.77 68.86 3,556.63
-
Murli 19.2 0.78 1,223.02 983.79 76.85 1,448.36
Gokul Refoils 82.35 2.11 442.74 335.09 12.28 822.92
-
Guj Amb Exports 20.45 1.21 561.34 298.59 59.82 738.75
Sanwaria Agro 34.55 0.44 154.28 126.93 0.6 643.3
Oswal Agro 22.35 0.22 8.75 5.83 1.17 590.89
Ruchinfra 20.3 2.53 419.5 240.98 3.16 507.82
-
Anik Industries 35.2 0.28 145.72 119.83 1.8 474.07
Rasoya Protein 26.8 9.84 92.26 77.82 71.82 406.17
-
Raj Oil Mills 10.69 0.93 100.34 92.59 22.61 361.88
-
Vimal Oils 68.25 4.48 50.43 33.4 0.06 231.76
Agro Tech Foods 463.95 0.21 72.91 58.95 28.46 207.29
-
AVT Natural 35.2 3.96 68.66 37.61 0 123.48
-
Kriti Nutrients 5.99 5.82 45.04 26.87 1.34 69.42
Divya Jyoti Ind 8.5 -4.6 31.37 23.56 0.17 68.35
-
KSE 226 5.18 72.25 35.12 0.71 64.41
Natraj Proteins 17.7 -0.9 17.6 9.1 0.2 49.69
 -
Modi Naturals 14.3 4.67 30.35 20.43 0.01 43.56
-
Kothari Ferment 8.5 3.74 28.03 14.44 0.13 29.27
-
Suryaoday Agro 18.55 4.87 31.11 10.66 0 25.13
-
Ritesh Int 6.24 4.88 18.46 8.85 0 18.65
-
Exelon Infra 8.69 3.44 2.57 2.21 0 14.04
Kanel Oils 3.2 4.92 5.16 1.5 0 4.11
Ashiana Agro 5.4 1.89 0.05 0 0 2.45
Richirich Inven 3.8 -1.3 0.71 0.47 0 1.88
NK Industries 42.35 2.67 56.29 12.63 0 -29.38
Source - www.moneycontrol.com

2.4 Future Of Edible Oil Company In India

The demand for edible oils in India has shown a compounded growth of 4.5% over the last 10
years and is estimated at 16.2 million tonnes for Oil Year (OY) 2010-11. India plays an
important role in the global edible oil market, accounting for approx. 10.2% share of
consumption; 7% share of oilseed production; 5% share of edible oil production and 13.6% share
of world edible oil imports for OY 2009-10. As per USDA estimates, India is the third largest
consumer of edible oils (after China and the EU-27 countries); and will account for 11% of
global edible oil demand and 16% of global imports in OY 2010/11F.

India’s annual per capita consumption has shown a steadily increasing trend from 4 kg in the
1970s to 10.2 kg in the late 1990s to current levels of ~13.5 - 14 kg. However, it still ranks well
below the world average of around 24 kg (per capita figures including consumption of bio-
energy), thereby signifying the high growth potential of the industry. Refer Charts 1 and 2 for
trend in domestic demand and per capita consumption of edible oils in India.
According to ICRA, the medium-to-long term demand outlook for edible oils in India is
favorable (with expected growth in the vicinity of 4-5% p.a.), catalyses by the growing
population and expected increase in per capita consumption which in turn would be driven by
changing lifestyles; growing urbanization; increasing proportion of middle class population and
steadily rising affluence levels.

2.4.1 Domestic production lags demand growth, thereby leading to heavy reliance on
imports

As compared to demand growth for edible oils, the domestic oil and oilseed production has
remained largely stagnant on account of low productivity in under-irrigated areas and shifting of
acreage from oilseeds to other crops. This has resulted in a significant demand-supply gap, which
has been met through imports which have been further incentivized by a sharp cut in import
duties. In the period from 2001 to 2008, import duties on crude soya bean oil / palm oil were in a
prohibitively high range of 40%-90%. In order to curtail inflation, GoI revised these protectionist
tariffs downwards to 7.5% for refined palm / soybean oil and 0% for crude palm / soya bean oil
in April 2008, resulting in a surge in volumes of imported oils that currently meet almost 45-50%
of domestic consumption requirements.
2.4.2 Reduction in import volumes witnessed for the first time in the last three years during
H1OY2010-11; nonetheless, high dependence on imported oils is expected to continue.

Edible oil imports witnessed a sizeable 21% y-o-y reduction in H1 OY2010-11 (November
2010- April 2011), as can be observed in Chart 4. This has largely been on account of relatively
higher domestic oilseed availability (~29-30 MT expected for OY2011 as against 24.9 MT for
OY2010) and consequently higher domestic oil production. The high crude palm oil prices
(trading almost at par with soya during December 2010- February 2011), following concerns
over production estimates in
Malaysia, also resulted in lower imports, as edible oil players resorted to running down of
inventory levels. The subsequent improvement in estimates of palm oil production has led to
some correction in prices, which coupled with forthcoming festive demand is likely to revive
import volumes in H2OY2011.

Considering the current year domestic edible oil supply of 8.0-8.5 million tonnes per annum and
factoring a normal growth of 2%-3% (through moderate expansion in cultivated area and yield
improvements) in supply, ICRA expects the significant gap between domestic demand and
supply to persist; and result in continued import dependence for at least 45% of consumption
requirements, notwithstanding the dip in imports seen in H1OY2011.

2.4.3 Apart from price, consumption is also influenced by regional preferences;

palm, soya bean and mustard oil are the three major edible oils

An important characteristic of the Indian edible oil consumption pattern is the variation in
preferences across regions, driven by taste and availability. For instance, soya bean oil is mainly
used in northern and central regions of India due to the local availability of soybeans. Mustard
oil is largely consumed in north-eastern, northern and eastern regions of India, as its pungency is
a desired and inherent part of the local cuisine. Palm oil has increasingly become the oil of
choice in southern India due to the warmer climate (palm oil gets a cloudy appearance in colder
climates) and easy availability from South-east Asia. The increased health awareness also
determines the consumption pattern with mustard and soya considered healthier than palm oil,
which has higher levels of saturated fats. Oils like rice bran and olive are also gaining popularity
due to their superior health properties, although their consumption remains fairly low in absolute
terms. Further, price economics also have an important role to play in determining consumer
choice, given that expenditure on edible oil constitutes a significant portion of the household
budget.
In terms of volume, palm, soyabean and mustard/rapeseed oil are the three major edible oils consumed
in India and together account for 75% of the total edible oil demand, as indicated in Chart While
mustard oil is almost entirely produced within the country, soya bean oil is imported in significant
quantities (about 45%-50%). Palm oil is entirely imported in crude form for refining in port based
refineries while some quantities are also imported in the refined form.

Given the cost economics and taste preferences of consumers, ICRA expects these three varieties of
edible oil to dominate the consumption mix. Accordingly, companies with an exposure to these oil
varieties stand to benefit. Given the inherent volatility in prices, ICRA believes that participants with a
diversified presence across edible oil categories would be better placed than participants focused on a
single variety of oil, due to the flexibility to modify product portfolio in line with market parity and
maintain optimum capacity utilization levels.

Some trends of consolidation visible in the industry; large-scale integrated players leading the capacity
addition process through expansion as well as acquisition/consolidation The edible oil industry in India
in the recent past has witnessed both organic as well as inorganic expansion by some of the major
players. AWL has added 1090 TPD of installed capacity for refining and 5050 TPD of installed capacity
for seed processing during CY 2010-11 by acquiring five operational plants and undertaking expansion
at three out of its four existing plants. AWL has also additionally taken over the operations of other
Wilmar associates in India (like Acalmar Oils & Foods Limited) so as to consolidate its pan-India
presence. Sanwaria Agro Oils Limited has added 1000 TPD crushing capacity in 2009 through
acquisition of two plants. KS Oils has set up new facilities at Kota, Ratlam and Guna, totaling 3400-
3600 tpd, and acquired a refining unit at Haldia. Further, some edible oil manufacturers have also
undertaken backward integration to strengthen their overall business model. KS Oils has acquired
1,38,000 acres of palm plantations in Indonesia while Ruchi Soya has access to 1,75,000 hectares of
agricultural land with palm plantations across different Indian states. While ICRA considers this
consolidation and capacity expansion trend as a favourable development due to the benefits associated
with large scale of operations, on the flip side, the adverse impact of such activities on the capital
structure; profitability and return metrics of the concerned companies, particularly during the gestation
period, presents a downside risk.