Emami Biotech Ltd, the edible oil and bio-diesel arm of Rs 8,000 crore Emami Group, has entered into an agreement with Kolkata-based Rasoi Group, to buy Rasoi brand of vanaspati and edible oil, for Rs 13 crore ($2.1 million), the company said.
The acquisition will be an addition to Emami's existing portfolio of edible oil brands such as Emami Healthy & Tasty and Himani Best Choice.
Founded in 1905, Rasoi Ltd (formerly Rasoi Vanaspati & Industries Ltd) offers cooking mediums and food related items such as salt and spices. Its products include vanaspati, refined oil, sunflower oil, palm oil and mustard oil.
"Rasoi is a leading vanaspati brand in West Bengal and one of the leading producers of vanaspati in India that enjoys a strong legacy of consumer trust. The brand offers synergy with our edible oil business which will offer great value. With the acquisition of the Rasoi brand, we would be adding vanaspati to our existing portfolio, enabling us to offer a wide range of choices to our consumers," said Aditya V. Agarwal, director, Emami Group.
"Emami Biotech is poised to be a Rs 5,000 crore company by end of this financial year. The acquisition of Rasoi brand is part of our inorganic growth plan and has been funded internally. This is line with our overall growth strategy to emerge as one of the top three edible oil companies in India," said Manish Goenka, director, Emami Group.
The Rasoi Group is engaged in the business of edible oils, consumer non-durables, auto components, real estate and OTC Healthcare products. The group has three listed companies - JL Morison (personal healthcare products maker), Rasoi (edible oil maker) and Hindustan Composites Ltd (industrial products and friction materials manufacturer).
In a separate disclosure Rasoi attributed its decision to sell the Rasoi oil brand to the challenges in the industry. “Production of vanaspati has become unviable due to heightened volatility in raw material prices and foreign exchange. As such, the company is constrained to take the decision of discontinuing the production of the same at its factory at Banganagar, West Bengal,” it said.
The firm is simultaneously expanding its business to add baby care products and aims to start its manufacturing line for the new unit at the existing oil plant.
Kolkata-based Emami Biotech, a Rs 3,500 crore company, was incorporated in 2002. Its product portfolio includes mustard oil, sunflower oil, rice bran oil, palm oil, soyabean oil, beside other blended oils.
The firm plans to set up its third refinery with a capacity of 2,000 TPD in Gujarat to cater to Northern & Western markets, which is expected to become operational in 18-24 months.
In August 2012, Emami Biotech invested Rs 340 crore to expand its refining capacity at its Haldia plant to 2,200 tonnes per day to manufacture refined palm oil, soyabean oil, refined sunflower oil and refined rice bran oil.
(Edited by Joby Puthuparampil Johnson)