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Ruchi Soya Industries gains on entering into Joint Venture with Kagome and Mitsui

29 Apr 2013 Evaluate

Ruchi Soya Industries is currently trading at Rs. 70.80, up by 1.35 points or 1.94% from its previous closing of Rs. 69.45 on the BSE.

The scrip opened at Rs. 69.20 and has touched a high and low of Rs. 73.85 and Rs. 68.00 respectively. So far 1, 93,000 shares were traded on the counter.

The BSE group 'B' stock of face value Rs. 2 has touched a 52 week high of Rs. 95.45 on 18-May-2012 and a 52 week low of Rs. 56.60 on 15-Mar-2013.

Last one week high and low of the scrip stood at Rs. 70.65 and Rs. 66.30 respectively. The current market cap of the company is Rs. 2,364 crore.

The promoters holding in the company stood at 54.68% while Institutions and Non-Institutions held 15.60% and 29.71% respectively.

Ruchi Soya Industries (Ruchi Soya), the leading FMCG player in India has entered into a Joint Venture (JV) with Kagome Co (Kagome), a leading tomato product company of Japan and Mitsui & Co. (Mitsui), one of the World’s largest trading, investment and services companies to revolutionize the Indian Tomato Market estimated to be producing 17 Million Tonnes per year. Ruchi Soya will have 40% stake in this JV and rest 60% will be held by a special purpose company (SPC) created by Kagome and Mitsui who own 66.7% and 33.3% share each in the SPC.

The Joint Venture ‘Ruchi Kagome’ plans to launch premium tomato puree, sauces, ketchup and other world-class products in India. It has identified land in Maharashtra to set up a manufacturing plant, with an initial investment of Rs. 44 crore, which is expected to be ready for commercial production by June 2014. Ruchi Kagome will work closely with Indian Farmers to drive a tomato revolution in the country through higher yielding seed, sharing global knowledge to educate local tomato producers & setting up local support centers to handhold farming community in India.

Currently India is second largest producer of tomatoes and also one of the major importers of processed tomato products. Factors such as lack of awareness about the market, poor harvest management and inefficiencies in the value chain have always been an obstruction for Indian trade.  ‘Ruchi Kagome’ plans to partner with the Indian Farmers to take Indian tomatoes to global standards and enable India to create import substitution.

The Ruchi Kagome Joint Venture reinforces the commitment of Ruchi Soya to bring their deep understanding of Indian Food & Agriculture market and extensive distribution network to the Joint Venture; Kagome’s commitment to bring their global customer relationships in the Foods Services Business and processing technology & knowledge to the Indian Market; and Mitsui’s commitment to provide their global network and establish sound internal controls for the Joint Venture company.

Ruchi Soya Industries is engaged in vegetable oils and other food products. It sells high protein soya food under the Nutrela brand.

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