Ruchi Soya forays into Nutraceuticals under joint brand name of 'Patanjali' - 'Nutrela'

Continuing with the diversification of its product portfolio, Ruchi Soya Industries Limited has forayed into the Nutraceuticals & wellness products segment. The board of the directors of the Company approved launch of 100% vegetarian, preservative free nutraceutical products to be marketed under "Patanjali" and "Nutrela" branding in the medical, sports and general nutrition category. The foray into nutraceutical segment demonstrates Ruchi's vision to develop affordable nutrition supplements that can reach masses and contribute to "Healthy India / Swastha Bharat".

To start with, the Company is launching 10 products, viz. Vitamin B12, Iron complex, Vitamin D, Vitamin C & Zinc complex, Daily active, Daily Energy, Weight Gain and Omega and shall soon introduce additional products in the market. The Company aims to have a range of products across various product categories in the next 1 year. This launch is made possible due to relentless efforts and the leadership of world renowned Yoga Guru Swami Ramdev ji and eminent Ayurveda, herbs and vegetation scholar Acharya Balkrishan ji who were instrumental in the product research and development. Ruchi is launching its nutraceutical range in midst of the Covid-19 pandemic, when the demand is driven by changing lifestyles, rising health literacy amongst people and tremendous opportunity in the growing preventive healthcare & dietary supplements category.

The Company proposes to use the joint branding of "Patanjali" and "Nutrela" for packaging, promotion, advertising and marketing the range of initial ten (10) products. The Company has obtained a non exclusive renewable license to use the "Patanjali" brand for which Ruchi shall pay PAL a royalty of 1% of the net manufactured volume. The entire range of our nutraceuticals and wellness products will be manufactured by Patanjali Ayurved Limited ("PAL") at the state of the art plant located at Patanjali Food & Herbal Park, Haridwar, under a contract manufacturing arrangement. PAL has signed non-compete arrangement for all nutraceutical products under agreed arrangements.

Ruchi's nutraceutical product range will have unique positioning in the market. The entire product range offers 100% vegetarian nutrition. Ruchi is using quality ingredients and these products are GMO free, gluten free with no added artificial flavour or colour. We have used organic ingredients in some products and several of our products are bio-fermented.

The products will be distributed pan India across pharmacies, general stores, e-commerce platforms, health & wellness stores, gyms etc. including Patanjali exclusive stores viz Mega Stores, Chikitsalayas and Aarogya Kendras for which the Company has entered into a distributor agreement with PAL.

The Board of Directors also approved execution of breakfast cereals and noodles assignment agreement between PAL and the company for a consideration of Rs 3.50 crore. This will enable the Company to foray into breakfast cereals and atta (wheat) noodles category under the "Patanjali" brand keeping in mind the health conscious consumer in mind. The rectangular range of 6 noodles variants are 100% vegetarian made from wheat flour, rice bran oil and contain high fiber and protein. The breakfast cereal products range of 7 varieties of Corn Flakes, Muesli, Instant Wheat Dhaliya, Oats etc and will also be sold under the "Patanjali" brand by Ruchi. The Company has entered into a non-exclusive renewable brand license agreement with PAL to use the "Patanjali" brand name for noodles and breakfast cereals against payment of royalty of 0.5% of the net invoiced amount. The products will be distributed by the existing distribution network of the Company and through PAL distribution network.

The Board also approved a distribution agreement between the Company and PAL for non-exclusive distribution of Ruchi Soya products including edible oil, biscuits, breakfast cereals, noodles and nutraceutical products. This will give Company access to Patanjali's super distributors, distributors, Mega stores, Chikitsalyas and Aarogya Kendras.

The foray into Nutraceuticals, breakfast cereals and noodle's product category is not only an excellent fit with Ruchi's existing brand portfolio but underscores its commitment to growing the consumer business. It is a natural extension to Ruchi's existing brand portfolio through which it serves its consumer base across the country. As a part of its product expansion strategy, the Company has successfully forayed into the product segment of Honey, High Protein Atta , premium edible oil and Biscuits in the last 18 months.

Shares of RUCHI SOYA INDUSTRIES LTD. was last trading in BSE at Rs.1086 as compared to the previous close of Rs. 1051.5. The total number of shares traded during the day was 8104 in over 1273 trades.

The stock hit an intraday high of Rs. 1090 and intraday low of 1061.1. The net turnover during the day was Rs. 8721327.

Source : Equity Bulls

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