Adani Wilmer, Ruchi Soya to form joint venture firm

Adani Enterprises, Wilmar International to hold 66.66% in the JV, rest to be held by Ruchi Soya

Gujarat-based food and edible oils firm Adani Wilmer and Madhya Pradesh-headquartered Ruchi Soya Industries have tied up to form a joint venture company for procurement, marketing, sales, and distribution of products such as soya food, oil seeds, and biodiesel.

The new joint venture (JV) company will cater to domestic food demand and both Adani Wilmer and Ruchi Soya will provide manufacturing support to this JV.

The share price of Ruchi Soya saw movements in both directions on the BSE on Wednesday. On Tuesday, the Securities and Exchange Board of India (Sebi) had barred Ruchi from dealing in commodities and entering capital markets, alleging cartelisation in castor-seed futures in January. (Sebi is the market regulator.) As a result, Ruchi Soya’s share price fell 19 per cent, but following news of JV with Adani, recovered. The shares closed at Rs 22.6 apiece on the BSE on Wednesday, a 2.5 per cent rise over the previous close.

Through their joint venture, Adani Wilmer, Adani Enterprises, and Wilmer International will hold a stake of 66.66 per cent in the JV company, while Ruchi Soya will hold the rest — 33.34 per cent. A non-binding term sheet has been signed. “A new joint venture company will be formed. Each party will contribute its portfolio of brands in relation to the products such as oil seeds, soya food, grains, castor oil, oleochemical, and biodiesel,” said Atul Chaturvedi, chief executive of Adani Wilmer.

“The name of this new company will be decided after we form the company and complete all legalities. The investments and the new brand name are yet to be decided," said Chaturvedi.

The joint venture company will have the exclusive right to originate, market, and distribute finished products of Adani Wilmar and Ruchi Soya in India.

Gautam Adani, chairman of Adani Group, said: “The proposed partnership between Adani Wilmar and Ruchi will have a positive impact on the overall agricultural landscape of India. We look forward to taking the next leap forward."

Dinesh Shahra, managing director of Ruchi Soya, said: “We feel we'll be able to leverage on each other's strengths to truly make a difference to the agricultural backdrop of the country."

According to the joint statement by the both companies, the proposed integration of Adani Wilmar's and Ruchi Soya's downstream businesses will serve as a catalyst for the further expansion of both parties' product portfolios and allow the joint venture to reach and address the consumer tastes, preferences and aspirations of India's 1.3 billion consumers.