Ruchi Soya Ltd, one of India’s largest edible oil companies, expects to more than double its crushing capacity utilisation rate due to new government incentives.
The company said its capacity utilisation was projected to rise from the current 15% to 30-35% after the Indian government announced that it would pay an additional 2% incentive for soya meal under the Merchandise Exports from India Scheme (MEIS), reported India Infoline on 8 December.
In the past two years, Ruchi had been able to utilise only a small part of its 3.72M tonne crushing capacity due to poor harvests, but soyabean availability had improved after the government agreed to pay farmers the difference between soyabeans’ market price and the minimum support price.
As a result, crushing operations at Ruchi’s key plants in Indore, Nagpur, Kota and Washim had increased by 30-40%, the company said.
Ruchi’s supplies to Patanjali Ayurved Ltd had also improved from its soyabean and mustard crushing and refining facility in Baran, Rajasthan.
Ruchi and Patanjali entered into an agreement in October that allowed Ruchi to exclusively sell and distribute the full range of Patanjali’s oils in large packs.
Additionally, Ruchi said the Indian government’s November import tax hike on all edible oils would boost domestic oil prices, which would in turn improve farmer incomes and lead to more planting in the upcoming soyabean season.
Ruchi Soya’s product portfolio in India comprises edible oils, soya foods, bakery products, the Vanaspati ghee brand and health foods and soaps.
The company announced in November that it was selling a majority share of its business, along with its branded edible oils operations, to Devonshire Capital in order to alleviate its financial difficulties.