Edible oil firm Ruchi Soya enters coal biz, bids for mine in Chhattisgarh

Since it is new to the mining sector, it had tied up with a Kolkata-based firm for tech support

Ruchi Soya Industries Limited, India's leading manufacturer and supplier of edible oil, is planning to extract coal by venturing into mining sector.

The Indore-based company had participated in the bid to mine coal in Gare Palma-III block of Chhattisgarh’s Raigarh district. The coal block had been originally allotted to state-run Chhattisgarh State Power Generation Company Limited (CSPGCL).

The power company had floated a tender and invited proposals for appointing a mine developer and operator (MDO) to extract coal. The raw material would be supplied to thermal power plants owned by CSPGCL in the state.

Ruchi Soya is one of the companies that participated in the bid. Since the company does not have any experience in mining sector, it had tied up with a Kolkata-based company for technical support. It had formed a consortium that had submitted the proposal.

The company did not respond to the mail sent for its version on the issues that include whether company would participate in other coal blocks also and the proposal submitted in Chhattisgarh was the onset of expansion in company’s portfolio.

Ruchi Soya’s financial performance in the oil business had not been sound according to the results. The reports underlined that the company made an after-tax loss of Rs 1257.20 crore in the year ended March 2017 as against net loss of Rs 1061.58 crore during the previous year ended March 2016. Even company’s sales declined 32.70 per cent to Rs 18427.70 crore in the year ended March 2017 as against Rs 27383.20 crore during the previous year.