5668 Investors following Ruchi Soya. Share this News with them.
0
Like this story, share it with millions of investors on M3
No reason to fear investor interest: Ruchi Soya
Ruchi Soya Industries Ltd, the country’s largest edible oil producer, said there was no threat of takeover by anybody as the promoters have substantial holding in the company.
Q: There is also talk that you are looking at backward integration and acquiring palm oil plantations to improve your margins. Can you take us through any plans there?
A: In our business the margins are very low; we are running between 1-2% profits after tax (PAT) level, which is very low against the peers in the global markets and the raw material pricing is the key for this business so we have decided to integrate our business to palm plantation and it's a high capex business so we acquired some palm plantation of the group company and Palm Tech company from Malaysia, which has plantation in India. Altogether we will have a land bank of almost close to 170,000 hectare and out of which over 30,000 hectare we planted 11,000-12,000 yielding and we have three oil mills so we are intending to have 20,000 hectare per year in next ten years to complete this 200,000 hectares.
We intend to acquire some more plantation companies so altogether we are targeting 200,000 hectare of plantation in India which will be on completion, will look at to give over Rs 500 crore per year income when this is completed and this will also improve our PAT level margins because Indian palm plantation is on EBIT of 35% where as the global palm plantation is at 70% but it needs low capex. The EBITDA is low and this will be a great advantage to the company.
