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Overview of the JV and the future of soyabeans in India
At the outset, it is in order to express how lucky Ruchi was to find partners such as DJ Hendrick and KMDI. Like with any joint venture, the process of discovering and aligning each other’s vision is the most challenging one. I am happy to say that this was a quick journey for us – which is evident by the fact that we have already done some preliminary pilot breeding successfully in the last few months.
Before I speak about the details of this Joint venture and its potential for the country, I feel it is important to take a quick step back and appreciate the history and evolution of the supply path that soyabeans have taken both globally and domestically.
Soyabeans are arguably the most important oilseeds in the world, providing oil, protein, processed foods and other derivatives to its consumers.
The soyabean seed is crushed in an extraction unit, and thereafter yields 18% crude soyabean oil and 82% Soyabean meal. The oil is refined to yield cooking oil and the meal is used as animal feed.
In recent years, soyabean oil has also been a major feedstock for biodiesel production in the world, which is in turn used as a renewable source of energy for vehicles, railways, aircrafts, generators and others.
In 1990, the world produced 104 Million TONNES of Soyabeans.
In 2000, the world produced 175 Million TONNES of Soyabeans.
This year, the world will produce over 280 Million TONNES of Soyabeans.
This explosive growth is primarily due to a rapidly urbanizing world with China leading the way. The demand and hence the price has also been fueled by the conversion possibilities ofsoyabean oil into biodiesel which has been mandated by several Governments in the world.
Currently, the supply of soyabeansis dominated by North America, Brazil and Argentina which account for almost 85 percent of the world’s supply. China is the fourth largest producer contributing 6 percent and India 4 percent.
This 4 percent is nearly 12 million TONNES of soyabeans.
Why is all this important?
Currently, India is producing that 12 million TONNES of soyabeans at an extremely low and inefficient yield of 1.017 TONNES/Hectare.
This has tremendous scope for improvement as the global average stands at 2.5 TONNES / Ha.
Poor productivity in India is due to the following –
- Poor management practices
- Low genetic diversity
- Susceptibility to diseases and pests
- Low seed replacement ratio
Further, 12 Million TONNES of soyabeans roughly translates into 1.8 Million TONNES of crude soyabeanoil and 8.3 Million TONNES of SoyabeanMeal.
All of the 1.8 Million TONNES of oil that these 12 million TONNES of soyabeans produce is consumed locally. In fact, this is far from sufficient. Last year, an additional 1.5 million TONNES of soyabean oil was imported. Overall, India consumes 18 Million TONNES of Vegetable oil and imports a little over 60 percent of this requirement.
Therefore, there is an extremely large dependence on imported oil which posesa long term risk for the government of India. BecauseIndia is home to more than 1/6th of the world’s population and is projected to be the world’s most populous country by 2025, the pitfalls of such rapid growth include severe strains on resources specially food availability at a price that is affordable to all.
Further, the Government of India is facing many problems with a widening trade and current account deficit, as well as a depreciating currency, inflation, and a depleting foreign exchange reserve.
These thoughts and worries are the basis and motivation for embarking on this Joint Venture.
I was introduced to David via email through Mike, all the way back in December 2012. I believe one of the hardest challenges we faced was coordinating a conference call between Canada, India, Singapore and Japan!
What was immediately encouraging was that all the challenges we faced in the preliminary months were dealt with as though we were already partners.
A Sincere Thank you to David, Mike and Dr.Jagdish for making this process a smooth one.
The Joint Venture companywill perform the following activities:
We will undertake a comprehensive soyabean breeding program that will use germplasm (or genetic resources) of soyabean seeds from across the globe that have desirable traits such as high oil content, greater pod size and count, and are drought and disease resistant. Our partners possess a large databank of these resources.
This germplasm will then be crossed with Indian germplasm in a complementary manner. Each season there will be an improvement and further testing, and after seven generations, a marketable variety should be established.
We are aiming for:
(1) Higher yield, closer to global standards.
(2) Higher Oil content
(3) Better Nutritional value
The most advanced procedures that are available to expedite variety development, such as, DNA marker technology, state of the art genomics, and fingerprinting procedures will be available to the JV via our partners, to accelerate modern variety development for India.
Further, the objectives of the JV can be achieved at an accelerated rate due to the presence of multi-seasons and trials in India as well as with the use of off-season nurseries to rapidly advance generations.
We have already imported material from different parts of the world which is being crossed with Indian soyabean varieties at our research farms in India. These procedures should not be mistaken with genetic modification of any sort.
At this point, I would like to reemphasize the difference between Genetically Modified or GMcrops and Non GM crops and why India is pro Non GM.
GM crops create something that is not found in nature. A particular gene is isolated from another species and transferred to another. For example, GM Soyabeans contain a strain from a bacteria that makes it resistant to herbicide.
However, The JV will not engage in any genetic modification.
What the JV is doing is simply exchanging pollen between the same species using the most advanced methodologies available, to breed offspring that have desired characteristics.
North and South America have both turned to GM Soyabean development, to much controversy from the rest of the world.
The European Union, Japan, UK and Australia have banned the use of GM foods due to risks that have not been specifically identified and are unsure of their safety for human consumption.
This JV plans to systematically increase the Non GM crop availability in India and solidify India’s position as the number 1 producer of Non GM Soyabeans in the world. This will facilitate trade flows at substantial premiums.
Finally, I would like to highlight what the future might look like for soyabeans in India.
Reiterating what my father said, this JV has the potential to spark another soya revolution in the country.
We plan to introduce one or more varieties that –
(1) Will improve the balance of trade by Reducing vegetable oil imports due to potential yield increases and increasing Non GM soyabean Meal exports
(2) We will also aim to improve the nutrition level available to the masses via higher calorific values, higher protein content and nutrients such as oleic acid
(3) We will help the Government provide Food security to its citizensby increasing domestic supply, increase the maturity range, enhance oil content, and breeding drought, disease and pest tolerant varieties which will mitigate the risk of crop failure.
(4) We will also attempt to addneutraceutical properties that can help to control cardiovascular diseases, cancer, osteoporosis and kidney disorders
To put the results in a different way:
Even if the yield is improved from the current levels by 30 percent and the oil content by 2 percent
That essentially means, assuming same acreage planted,
An Additional 3.6 Million Soyabeans and 960,000 TONNES of Soyabean Oil is produced
An Additional 2.9 Million TONNES of Soyabean Meal is produced
At current prices of 1100 USD/TONNESfor oil 500 USD/TONNES price meal, this would mean reduced imports and increased export receipts to the tune of 2.5 Billion USD for the Country.
Additionally,
Ruchi Soya, being the largest crusher and processor of Soybeans in India, with an annual crushing capacity of 4.1 MillionTONNES/Annum ( or25 percent of the country’s existing supply) will benefit via
(1) Higher capacity utilisation and reduction of supply bottlenecks due to weather shocks and low crop availability
(2) Non GM premiums for Soyabean meal exports to the European Union and other Non GM consumers
(3) Substantial Reduction of import dependency and insulation from world supply shocks thereby controlling inflation
(4) Food Grade and specialised soyabean development and product diversification
(5) Seed Marketing and further supply chain integration
Furthermore, Ruchi will continue to support the Indian farmer aswe recognize the importance that Soyabeans have as a food source for Indians. This Joint Venture is a substantial investment into Research and Development that we feel will have a far reaching impact on the Indian Agricultural landscape.
Many thanks to all the people involved and I look forward to making this a success with you.
Thank you.
Ruchi Soya surges on JV with two Japanese firms
Mumbai: Nutrela Soya Food has launched its television commercial. The product is being promoted through a tagline which is in sync with the brands positioning- “Roz Kuch Naya, Roz kuch Soya.”
The objective of the TVC is to highlight the versatility of Nutrela Soya Food and therefore to make it as an integral part of a households day-to-day meal.
The campaign will be spread across eight weeks with a TVC breaking first during the ongoing IPL season and then followed with other channels that include Hindi GEC, regional GEC and lifestyle channels.
The company has also scheduled for a product sampling across women’s magazine along with recipe ads/booklet to explain the usefulness of soya.
The new 30 second Nutrela Soya Food TVC has been depicted from the backdrop of a leisure trip where a couple enjoying their meal and is later joined by one of their couple friends. The TVC is thereby trying to acknowledge the creativity and versatility of the home-maker, by acknowledging her as food designer.
The TVC has been conceptualised by Soho Square Mumbai and produced by Apocalypso. Meawhile, Madison Media is the media agency on the account.
Soho Square Mumbai ECD and creative heads Satish deSa, Anuraag Khandelwal said, “We set out to get soya out of the blind spot, and into the limelight. To get the world to acknowledge it for what it really is – versatile and creative. We went about doing this by first acknowledging the house-bound wife for what she really is – versatile and creative. ‘Food designer’ status, we believe, is one of the acknowledgments she truly deserves.”
The concept of the TVC is giving credit and gratification for house wives, as she is the only person who doesn’t get either monetary or emotional gratification as against the working men or women. Hence, the company decided to acknowledge the creativity of the home maker by providing her a product (Nutrela Soya Food) that can be integrated well with every dish and thus enables her to make “Roz Kuch Naya”.
RSIL AVP – marketing – consumer brands division Sandipan Ghosh added, “Home makers or Super Moms constantly aspire to bring in variety in food which is healthy and tasty and cuts across different consumption occasion for their kids, spouse and family in everyday life. We wanted to bring Nutrela Soya to the party as it is an extremely versatile ingredient. Thus, the effort is on increasing consumption by creating awareness on everything that can be done with soya.”
Ruchi Soya Plans Palm Processing Unit In State
Ruchi Soya Industries, India’s largest cooking oil and soya food maker, plans to set up an oil palm processing mill in Odisha at an investment of Rs 30 crore.
“We will initially set up a 10 tonne per hour fresh fruit bunches (FFB) processing mill next year. We are exploring for a location in districts like Mayurbhanj, Balasore and Bhadrak. The plant will take two years for operations”, said Dinesh Shahra, founder and managing director, Ruchi Soya Industries.
The company has started oil palm cultivation on 28,000 hectares land in Mayurbhanj, Balasore, Bhadrak and Kendrapada districts for which the company has entered into a tripartite agreement with the state government and farmers.
Ruchi Soya processes about 0.52 million tonne oil palm per annum.
Apart from Odisha, Ruchi Soya is working with the farmers in the states of Andhra Pradesh, Mizoram, Gujarat, Tamil Nadu, Karnataka and Chhattisgarh. In Andhra Pradesh, Ruchi Soya has access to over 30,000 hectares of plantation. The company operates four oil processing mills in Andhra Pradesh with aggregate FFB processing capacity of 125 tonne per hour.
“We also have plans to set up an oil refinery in Odisha”, he added.
On hiking the prices of edible oils in the wake of rupee weakening against the dollar, Shahra said, there is no concern for price rise as the international prices of edible oil are coming down and in India, the price is also falling because of the good domestic oil seed crops this year.
The company imported about 1.4 million tonne of both crude and edible oil last year.
Ruchi Soya partners Japan cos for edible oil
To introduce a super premium edible oil brand which Indian consumers have never witnessed, Ruchi Soya Industries, India’s leading food and agro-based FMCG player, has inked a joint venture with J-Oil Mills Inc and Toyota Tsusho Corporation (TTC), both from Japan. Under the terms of agreement, a joint venture company would be formed soon by the probable name of Ruchi J-Oil in which Ruchi Soya would have a majority stake of 51%. While J-Oil, the technology partner in the joint venture, would have 26% stake with the remaining 23% proposed to rest with TTC. “This alliance is an important step towards our business strategy of expanding our product portfolio by bringing value added and healthier products. We will provide raw materials and necessary marketing and distribution assistance to the JV. J-Oil will provide technical assistance and TTC with its rich global experience will provide management assistance for internal control and access to international markets through its network,” said Dinesh Shahra, Founder and Managing Director, Ruchi Soya.
In the joint venture, however, Ruchi Soya would look into manufacturing, branding sales and distribution with the company’s existing expertise in these areas. For this, however, Ruchi would transfer its existing soya processing business in Shujalpur in Madhya Pradesh to the joint venture to fetch Rs 40 crore. The objective of this joint venture unit would be to introduce new edible oil for Indian market which local consumers have experienced in the past, a Ruchi Soya official said. The JV will be managed by a board consisting of representatives from all the three companies. The JV plans to start supplying products to the institutional customers by the end of 2013 and launch high quality consumer products for the Indian markets in the second half of 2014.
Justifying the need of such joint venture, Sumikazu Umeda, President & CEO, J-Oil Mills, said, “The main purpose of this investment is to start our first ever business activity overseas in a promising country like India. J-Oil sees India as a vast and fast growing market and has plans to establish as a leading company in high quality value added edible oil segment.” “Ruchi J-Oil JV provides us appropriate crossover opportunity to leverage our business networks, product portfolios, and skill sets. We create Global Vision 2020 in which we identified three business areas that we expect sustainable growth. We aim to expand food business in life and community field,” said Yoshiki Miura, Managing Director, TTC.
Ruchi Soya joins hands with GAIN and CECOEDECON
Ruchi Soya joins hands with GAIN and CECOEDECON for the Fortification of Mahakosh Soyabean Oil with Vitamin A and D
CECOEDECON, GAIN and Soyabean oil processors join hands in Madhya Pradesh
Mahakosh soyabean oil will now have added health benefits to tackle deficiency of Vitamins
June 18, 2013, Bhopal: India’s leading FMCG Company and No. 1 manufacturer & marketer of Edible oil and Soya products, Ruchi Soya Industries Limited (Ruchi Soya) will play a pivotal role in the project on ‘Soybean oil fortification’ in Madhya Pradesh. Under this project, largest selling Soyabean oil brand in the state ‘Mahakosh’ will now have additional health benefits of Vitamin A and D.
This was announced recently in Bhopal during the official launch ceremony of soybean oil fortification project graced by the Honourable Chief minister of Madhya Pradesh Shri. Shivraj Singh Chouhan. Also present on the occasion was Shri Kailash Vijayvargiya, Honourable Minister of Science & Technology & Food Processing, Government of Madhya Pradesh along with several other dignitaries.
Centre for Community Economics and Development Consultants Society (CECOEDECON) has been working on ‘Soybean oil fortification’ in collaboration with the United Nations affiliated body, Global Alliance for Improved Nutrition (GAIN) and edible oil manufacturers in Madhya Pradesh. Under this project, soyabean oil by leading companies will be fortified with the essential vitamins A & D. This initiative aims to curb malnutrition in Madhya Pradesh with a primarily focus on the nutritional security.
Mr. Sarvesh Shahra, Business Head, FMCG and Specialty Ingredients, Ruchi Soya Industries
Limited commented, “The objective of the soyabean oil fortification project in Madhya Pradesh
is to reduce health related problems arising due to Vitamin A and D deficiencies in the state. We are happy to partner with the NGOs and offering healthier options to the consumers of our soya oil brand Mahakosh in Madhya Pradesh. We will also work closely with NGOs like CECOEDECON and GAIN on the awareness generation campaign on Vitamin A and D deficiency and the strategies to address it.”
Ruchi Soya Industries Limited is India’s leading FMCG Company, the No. 1 manufacturer and marketer of Edible oil and Soya products under popular retail brands like Nutrela, Mahakosh, Sunrich and Ruchi Gold. An Integrated player from farm to fork, Ruchi Soya has secured access to oil palm plantations in India and other important parts of the world. Ruchi Soya is also the highest exporter of soya meal, lecithin and other food ingredients from India. Ruchi Soya is committed to renewable energy and exploring suitable opportunities in the sector.
The Global Alliance for Improved Nutrition (GAIN) is an alliance driven by the vision of a world without malnutrition. Created in 2002 at a Special Session of the UN General Assembly on Children, GAIN supports public-private partnerships to increase access to the missing nutrients in diets necessary for people, communities and economies to be stronger and healthier. GAIN is a Swiss foundation headquartered in Geneva, and has a global presence.
The Centre for Community Economics and Development Consultants Society (CECOEDECON) was founded by a small group of young, committed social workers to provide immediate relief to the victims of devastating floods in Jaipur district in 1982. From a very modest beginning as a relief agency, ECOEDECON has evolved into a civil society organization pursuing integrated participatory development and advocating human rights.
JUST 2/250:RUCHI SOYA,ITC FASTEST HOMEGROWNS
Only two home-grown Indian companies — Ruchi Soya & ITC — have made it to the top 250 consumer companies in the world, says a survey by Deloitte titled ‘Global Powers of the Consumer Products Industry 2013’.
While Ruchi Soya has been ranked at 121, ITC stands at 150. For Ruchi Soya that manufactures edible oil and soybean products, it’s an improvement of 54 positions, Last year, the company stood at 175. On the other hand, cigarette and consumer goods maker, ITC has slipped by seven position in this year’s ranking.
If we look at the list of 50 fastest growing company in the world, Ruchi Soya has been ranked at 13, followed by ITC at 39.
While Ruchi Soya has recorded a 66% growth in sales in 2011-12, ITC’s net sales jumped 17.5% in the same period.
This is based on a survey by Deloitte on the data available till June 2012. For a company to make it to the list of top 250 consumer product companies, it has to have a minimum sale of Rs16,600 crore and has to register at least a 7% growth in sales on a yearly basis.
The report points out that as sales in the other established markets are taking a beating, companies from the emerging markets have started taking the lead in the fastest growing company in the world and going forward, this trend is likely to continue.
Dinesh Shahra, managing director of Ruchi Soya, said, “Improved branded sales, better sales realisation of oilseed extraction, effective control on the costs and favourable business sentiment helped us to get better performance in the past one year. We are making our efforts to have good performance on a sustained basis in the times to come.”
An ITC spokesperson said: “ITC’s aspiration to be the No. 1 in the FMCG sector in its new consumer goods businesses is supported by its relentless effort to build world-class brands that create, capture and retain value in India. These brands have earned significant consumer franchise and in addition, we are looking at enhancing the competitiveness of the entire value chain.”
Ruchi Group 