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Dear Shareholders, 2015-16 proved to be a challenging year for global and Indian businesses, especially for companies operating in the agribusiness and commodity space. Despite challenges, we continued with our mission of enhancing our brands portfolio, strengthening our manufacturing and R&D capabilities and further expanding our distribution reach. We tried to anticipate future needs and intensified our capabilities accordingly.
According to United States Department of Agriculture (USDA), India’s edible oil has a market size of 20.23 million metric tonnes (MT) in volume (annual consumption) and is valued at over INR 1 trillion. (June 2015 estimates). The national per capita consumption of edible oils and fats is 14 kg per annum, which is substantially lower than the world average of 20 kg per annum. While in developed countries the figure is 35 kg per annum. India’s per capita consumption is expected to increase in future and that too substantially.
The country’s vegetable oil consumption witnessed a significant growth during the year. Factors like growing population, increasing household income, surging demand and rising health awareness contributed to this growth. The edible oil industry plays a significant role in ensuring food security for India’s billion plus population. Besides, it has immense potential in saving the country’s valuable foreign exchange. India is estimated to have spent over $10 billion on the imports of edible oil, making it the third-biggest import item after crude oil and gold.
With brands like Nutrela, Mahakosh, Sunrich and Ruchi Gold, Ruchi Soya is well poised to capitalize on the ever increasing demand for edible oil in the country. These brands have built a strong equity in the market in their respective segments.
A recent study by Indian Market Research Bureau (IMRB) has revealed that 80% Indian diets are protein deficient. This provides a great opportunity for nutritious and protein-led foods like soyabean. Thus, we see tremendous potential for our brand Nutrela, a name synonymous with soy protein in the country. Nutrela has much more protein content than what is found in meat, egg, wheat or milk. This makes it the ideal source for protein.
CHALLENGING OPERATING ENVIRONMENT
During the year under review, the Company’s performance was adversely impacted by various factors. Sustained pressure in global commodities market, weak and erratic monsoon in the country, foreign exchange fluctuations and overall economic downturn largely affected our business. Turbulent global market conditions, coupled with a steep fall in prices of commodities such as soyabean, edible oils, coffee, guar gum and castor also impeded our growth.
But, despite challenges, our top line stood at Rs, 27,805 crore, recording only a marginal decline over last year.
BRANDED SALES BUSINESS
Over the last couple of years, our relentless focus has been to build enduring brands, and we have been largely successful in this regard. Our branded sales business registered a healthy growth of close to 10%. Our eminent brands including Ruchi Gold and Mahakosh Soya recorded double digit growth and continued to gain market share. Besides, Nutrela and Sunrich maintained their market share. During the year, the branded edible oil sales grew by over 15% in terms of volume.
Going forward, we will continue to strengthen our distribution reach, focus on brand building, innovate new products and packaging techniques, penetrate into the retail space and bolster our market presence. The Company is confident of the core branding and foods business that continues to be strong and resilient.
This will drive the future growth and meet the expectations of the various stakeholders.
Therefore, we are positive about our long-term business growth. We are committed to building a ‘Healthy India’ with our nutritious and high-quality food products. As we move forward, we will create value for the environment, people and communities, while fulfilling our business objectives. I, on behalf of the entire leadership team, deeply cherish the trust and support that you have provided to the Company in all these years. I seek your continued cooperation in creating sustainable value for our consumers, farmers, employees, investors and all other stakeholders.