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Ruchi Soya to merge 6 group cos with itself

Our Bureau

Mumbai , Oct. 7

RUCHI Soya Industries Ltd (RSIL), the flagship of the Ruchi group, on Friday announced a major restructuring exercise by merging six companies within the group to create a Rs 7,800-crore entity.

RSIL is currently an agri-business company with an annual turnover of Rs 3,922 crore.

Under the composite scheme of arrangement and amalgamation, unlisted group companies — General Foods Ltd, Ruchi Health Foods Ltd, Ruchi Pvt Ltd, Ruchi Credit Corporation Ltd, Param Industries Ltd and Aneja Solvex Ltd — will be merged with RSIL.

The soya processing, edible oil and fat business of Madhya Pradesh Glychem Industries Ltd (MPGIL) will be transferred to RSIL by way of an outright sale.

After the restructuring, RSIL will focus on the edible oil and foods business while the group company MPGIL will focus on dairy products.

Under the scheme of arrangement, Anik Industries Pvt Ltd, a dairy products company, will be merged with MPGIL.

Optimising group resources: Explaining the rationale behind the restructuring exercise, Mr Dinesh Shahra, Managing Director, RSIL, said: "The restructuring exercise will help to optimise group resources and will reflect economies of scale and size of the group."

The merger of the group companies will be effective from April 1, 2005, subject to statutory and other clearances.

"This is a stepping stone to becoming a leading global player in the edible oil business. Also, the exercise is growth and earnings accretive and beneficial to all the stakeholders," Mr Shahra said.

Branding and growth: "Our accelerated thrust on branding will drive our business strategy. Post-merger, revenue from our brands will be over Rs 1,300 crore, making us among the top players in the FMCG industry in the country," he added.

The boards of all the companies have approved the scheme of arrangement.

"With effect from the appointed date, that is, April 1, 2005, the business of MPGIL will be transferred to RSIL for Rs 80.57 crore by way of slump sale," Mr V. Suresh Kumar, Vice-President, RSIL, said.

RSIL is a fully integrated soya processor and claims to be the first company in the country to export soya meals, manufacture edible-grade soya flour and textured soya proteins.

Ruchi has been in a capacity expansion mode for the last three years, its capacity having increased threefold.

Ruchi has a wide range of branded edible oil varieties such as Nutrela, Soyumm, Sunrich and Ruchi Gold, Nutrela Vanaspati and Mandap.

RSIL share was quoted on BSE today at Rs 293 per share.

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