Ruchi Soya eyes significant expansion for FY11

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Ruchi Soya eyes significant expansion for FY11

Ruchi Soya is eyeing significant expansion for FY11. In addition it is also looking at newer FMCG segments aside from soap. Speaking to CNBC-TV18 exclusively Ruchi Soya's MD Dinesh Shahra, spoke about his outlook for the company for the next one-year.

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Excerpts from Midcap Radar on CNBC-TV18 Watch the full show » ALSO READ See latest News about Ruchi Soya See previous management interviews See what other Experts & Brokerages are saying about Ruchi Soya Ruchi Soya BSE | NSE 28/05/12 Are Mutual Funds betting on Ruchi Soya?

Ruchi Soya is eyeing significant expansion for FY11. In addition it is also looking at newer FMCG segments aside from soap. Speaking to CNBC-TV18 exclusively Ruchi Soya's MD Dinesh Shahra, spoke about his outlook for the company for the next one-year.

Below is a verbatim transcript of the interview. Also watch the video.

Dinesh Shahra: We have been growing for last so many years more than 15% to 20% every year. We have similar growth plans for the current year also. We are already implementing expansion of our refining capacity by over a million tonne. We are targeting to be a 3.2 million tonne capacity of palm refining. That will make us number third in the world now and we are also planning out to integrate our palm refining business in palm plantations that's why we did two acquisitions in the current year and we are also going to expand green field project in Africa and Asia to integrate our palm oil supplies. That's the growth plan we have.

Q: Also talking about Sunshine and Oleochem merger, what are the opportunities specifically can you tell us, what are the opportunities that you see from the merger?

A: Today, this group company what we acquired the reason was because it was a backward integration for us and forward integration. The raw material for this industry, 85% comes from the byproduct of the refining business and it was adjoining to our Kandla refinery. So a lot of duplicate cost will be reduced and it will help us to convert the basic fatty acids and stearin into Oleo chemicals. It will allows us to make soap also and that will give us a FMCG food extension because we are a edible oil distribution company, so soap can also be a FMCG product and it will expand our FMCG portfolio.

Q: Aside from soaps can you also tell us what the other plans are? Obviously you have several other FMCG segments, so aside from that what are the plans for other FMCG segments?

A: We are looking to concentrate more on bakery shortening and bakery fats and participation in the industrial consumer, so this product range we want to expand, we may introduce in course of time table margarine also for the consumers.

Q: Talking about your overall outlook for input costs, especially talking about the prices on soya beans and oil seed, can you just give us an outlook for that?

A: Last year the farmer could not get a good price, so you must have seen there is lot of processing plan did not fair well, especially in the processing capacity. In our case it was compensated by port based refinery so we grew last year also but going forward we think that if the rains are normal, we expect that the crop will be good and processing capacity will be utilized better because a lot of farmers are still holding the older beans. With older beans and the new beans coming in we feel the crushing industry should do better.