Ruchi Soya surges on JV with two Japanese firms

The announcement was made during trading hours today, 5 June 2013.

Meanwhile, the S&P BSE Sensex was up 32.35 points or 0.17% at 19,578.13.

On BSE, 37,000 shares were traded in the counter as against average daily volume of 52,362 shares in the past one quarter.

The stock hit a high of Rs 70 and a low of Rs 66.40 so far during the day. The stock had hit a 52-week high of Rs 94.75 on 14 June 2012. The stock had hit a 52-week low of Rs 56.60 on 15 March 2013.

The stock had outperformed the market over the past one month till 4 June 2013, rising 0.6% compared with the Sensex's 0.15% fall. The scrip had also outperformed the market in past one quarter, jumping 14.57% as against Sensex's 3.54% gain.

The edible oil maker has equity capital of Rs 66.78 crore. Face value per share is Rs 2.

The board of directors of Ruchi Soya Industries (Ruchi Soya) today, 5 June 2013, consented to form the Joint Venture (JV) company with J-Oil Mills Inc. (J-Oil) and Toyota Tsusho Corporation (TTC) of Japan. Ruchi Soya will have 51% stake in the JV, J-Oil 26% stake & TTC remaining 23% stake. J-Oil is a Japan based edible oil major, and TTC is one of the largest global trading companies of Japan. The JV company is planning to enter in to the business of production and marketing of high quality, functional edible oils. The board of Ruchi Soya has approved the sale and transfer of Soya processing business of the company being run at its plant situated at Shujalpur, in Madhya Pradesh to the proposed JV, Ruchi Soya said in a statement.

The JV will be managed by a board consisting of representatives from all the three companies. The JV plans to start supplying products to the institutional customers by the end of 2013 and launch high quality consumer products for the Indian markets in the second half of 2014.

Mr. Dinesh Shahra, Founder & Managing Director, Ruchi Soya commented, "This alliance is an important step towards our business strategy of expanding our product portfolio by bringing value added & healthier products. Ruchi Soya will provide raw materials and necessary marketing and distribution assistance to the JV. J-Oil will provide technical assistance and TTC with its rich global experience will provide management assistance for internal control and access to international markets through its network".

Mr. Sumikazu Umeda, President & CEO, J-Oil Mills said, "The main purpose of this investment is to start our first ever business activity overseas in a promising country like India. J-Oil sees India as a vast and fast growing market and has plans to establish as a leading company in high quality value added edible oil segment".

Mr. Yoshiki Miura, Managing Director, Toyota Tsusho Corporation said, "Ruchi J-Oil JV provides us appropriate crossover opportunity to leverage our business networks, product portfolios, and skill sets. We create Global Vision 2020 in which we identified three business areas that we expect sustainable growth. We aim to expand food business in life and community field".

J-Oil Mills is a Japan-based company engaged in manufacturing, processing and sale of oils and fats, oilseed meals, starch, various types of foods, feedstuff and fertilizers, and food-producing machinery. It also has business interests in warehousing, harbour and land transport agency business, and Real estate among others.

Toyota Tsusho Corporation has been growing steadily together with the automotive business as the main axis. Tomen also has been developed with a wide range of business and customers in nonautomotive field. Two companies merged on 1 April 2006, and started as newborn Toyota Tsusho Corporation.

Ruchi Soya Industries' consolidated net profit declined 59.2% to Rs 86.92 crore on 65.6% growth in net sales to Rs 30264.38 crore in the year ended 31 March 2013 (FY 2013) over the year ended 31 March 2012 (FY 2012).

Ruchi Soya Industries is India's leading FMCG company and India's number one cooking oil and soya food maker and marketer. An Integrated player from farm to fork, Ruchi Soya has secured access to oil palm plantations in India and other key regions of the world. Ruchi Soya is also the highest exporter of soya meal, lecithin and other food ingredients from India.

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