Indore-headquartered Ruchi Soya Industries Ltd, one of India’s largest edible oil companies, is forming a joint venture with two Japanese firms – J-Oil Mills, Inc. and Toyota Tsusho Corporation (TTC). Ruchi Soya will also sell its soya processing business, being run at its plant located at Shujalpur in Madhya Pradesh, to the proposed JV.
The financial terms of the transaction are not disclosed.
Ruchi Soya will hold 51 per cent stake in the JV with J-Oil picking up 26 per cent while the remaining 23 per cent will be owned by TTC.
The JV plans to enter into the business of production and marketing of edible oils. It will also start supplying products to institutional customers by the end of 2013 and further plans to launch consumer products for the Indian market in the second half of 2014.
“Ruchi Soya will provide raw materials and necessary marketing & 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 MD of Ruchi Soya.
“The main purpose of this investment is to start our first-ever business activity overseas in a promising country like India,” said Sumikazu Umeda, president and CEO of J-Oil Mills.
Public-listed Ruchi Soya is a flagship company of Ruchi Group, which has a turnover of more than 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 exporters of soya meal, lecithin and other food ingredients. It has brands like Nutrela, Nutrela Soyumm, Ruchi Gold, Mahakosh, Sunrich and Mandap, among others.
Only recently, it has formed Ruchi Kagome, a joint venture with two Japanese firms, Kagome Co Ltd and Mitsui & Co Ltd, for processed tomato products.
Japan’s edible oil firm J-Oil Mills is engaged in manufacturing, processing and sale of oils and fats, oil seed meals, starch, various types of foods, feed stuff & fertilisers and food-producing machinery. It also has businesses in warehousing, harbour, land transport and real estate, among others.
One of the largest Japanese trading companies, Toyota Tsusho Corp, a wholly owned subsidiary of Toyota Group, is engaged in the trading of steel, aluminum, machinery, electronics, energy, chemicals and other consumer products.
In the edible oil space, Cargill, Inc. acquired the flagship brand Sunflower Vanaspati of Azim Premji-led Wipro Ltd in October 2012.