Indore-headquartered Ruchi Soya Industries Ltd, one of India's largest edible oil companies, has formed a joint venture for processed tomato products christened Ruchi Kagome with two Japanese firms Kagome Co Ltd and Mitsui & Co Ltd.
In the JV, Ruchi Soya will hold 40 per cent stake and rest 60 per cent will be held by a special purpose vehicle created by the two Japanese partners with Kagome and Mitsui owning 66.7 per cent and 33.3 per cent stake respectively.
Ruchi Kagome will initially invest Rs 44 crore to set up the first manufacturing plant in Maharashtra which is expected to be ready for commercial production by June 2014. It plans to launch premium tomato puree, sauces, ketchup and other products in India.
Currently, India is the second largest producer of tomatoes and also one of the major importers of processed tomato products with the domestic industry estimated to be producing 17 million tons per year.
“We are planning to launch a range of tomato products, based on world class technology to be provided by Kagome. These products will be marketed in both, the business to business (food services) segment and the business to consumer (retail) segment,” said Dinesh Shahra, founder and MD of Ruchi Soya.
Hidenori Nishi, president, Kagome, said the new venture is a strategic fit for its global expansion plan. “We strongly believe that the radical improvement in the purchasing power of Indians, health consciousness and change in the consumption pattern of people in the country are some of the potential future business drivers for us as we are entering India,” he said.
Kagome was founded in 1899 and is engaged in products like vegetable-based foods and drinks for both consumer and institutional customers. It is one of the pioneers of tomato processing in Japan.
Founded in 1986, Ruchi Soya is a flagship company of Ruchi Group of Industries, which has a turnover of over Rs 13,000 crore. Besides being a leading manufacturer of edible oils, vanaspati, bakery fats and soya foods, Ruchi is also one of the biggest exporter of soya meal, lecithin and other food ingredients from India. It has brands like Nutrela, Nutrela Soyumm, Ruchi Gold, Mahakosh, Sunrich and Mandap among others.