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Tuesday, Sep 06, 2005

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Ruchi Soya bid to boost branded sales

Sriram Srinivasan

Chennai , Sept. 5

RUCHI Soya Industries, the edible oil and soya foods company known for brands such as Ruchi Gold and Nutrela, plans to increase the number of its dealers by 40 per cent in the next two years — a move that could boost its branded sales.

Branded sales, which fetch higher margins than traded products, have risen to about Rs 1,000 crore from Rs 250 crore five years ago for Ruchi Soya, enabling it to migrate "from a substantially trading platform to that of manufacturing and branding," said Mr Dinesh Shahra, Managing Director.

The company currently has nearly 2.5 lakh dealers, catered to by 1,700 distributors. "We want to reach 3.5 lakh outlets by the end of March 2006," said Ms Amrita Shahra, Head-Business Development.

Apart from focussing on grocers, general provision stores and chain stores in metros and mini-metros, Ruchi Soya will try to expand coverage in Class III and IV towns, wherever feasible, she said.

Smaller packs (50 ml and 100 ml) of Ruchi Gold oil, which ensure lower outlay, will be used to target the consumers who have a relatively lower purchasing power and are also price-sensitive.

Although a major chunk of growth is driven by metros and mini-metros, the company expects "large conversions from loose oil to consumer packs" in towns. Apart from market expansion, Mr Dinesh Shahra said Ruchi Soya is in a position to benefit from "movement up the value chain'', and therefore its focus is likely to be on Nutrela, its premium brand.

"Ruchi Soya has positioned Ruchi Gold at the popular/value-for-money end and Nutrela at the premium end. Nutrela is further being leveraged on the health platform with likely extensions in foods and premium oil space," he said.

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