Ruchi Soya Industries - Strategic alliances with Pentaloon Retail

Ruchi Soya Industries Ltd has informed BSE that Pantaloon Retail India Ltd part of the Future Group on July 22, 2006 signed a strategic alliance agreement with the Company to partner for the expansion of the refined edible oil business in the country.

Pantaloon Retail India Ltd, a Rs 20000 million company, is a leading multi-format retailer with over 3.5 million square feet of retail space spread over 100 store formats. Some of the Company’s popular formats include Pantaloons, Big Bazaar, Food Bazaar, Central, E-Zone, Collection I, Tusli, Turmeric, F123 among others.

Edible oil is emerging as a very important category for Food Bazaar accounting for more than 10% of its revenues. Edible Oils as a category can be expanded to about 15% of the total category by partnering and experimenting with a large oil player. This involves larger packs, private labels, new product developments and ‘fresh & pure’ oil. Food Bazaar has tremendous consumer insight on how this category can be expanded, the need, gaps, the price sensitiveness of brands and consumer preference for oils across the country.

With this partnership, Food Bazaar and the Company are attempting to expand the category. The Company stands to benefit through this alliances by expanding the sale of its brands like Nutrela, Ruchi Gold, Nutrela Soyumm, through the Food Bazaar outlets. Food bazaar stores are expected to grow from the current size of 50 to 200 in the next two years. Besides, the Company will also benefit from the direct distribution of its products through Food Bazaar. This platform will help develop premium products and brands and test market them at Food Bazaar stores. Following its success, the same brands can be sold through the Company´s exhaustive countrywide distribution network.

The Company´s brands will also find preferential brand visibility and treatment at the Food Bazaar stores. This year more than 20 crore footfalls are expected across all formats of the Future Group. The Company will also create exclusive private labels under ‘fresh & pure’ private label at most attractive prices for Food Bazaar. It will also be a partner for the Future Group in its select new ventures.

Food Bazaar will benefit from the Company´s integrated manufacturing facilities spread across the country at Indore, Kota and Nagpur (soya cultivating belt) and plants at Patalganga, Mangalore and Haldia (proximity to ports). In future, Food Bazaar will also offer its customers the best in edible oil.

Commenting on the strategic alliance with Pantaloon Retail, Mr Dinesh Shahra, Managing Director of the Company, said, "The alliance will provide us the platform to showcase our branded portfolio through Pantaloon´s pan-India presence. This tie-up will help us cater to the growing demand for FMCG products and reap the benefit of rising disposable income."

Source : Equity Bulls

Keywords