India’s Ruchi Soya Industries has signed a three-year agreement to process and pack edible oils supplied by consumer goods company Patanjali Ayurved, the Economic Times reported on 13 February.

"The agreement with Patanjali Ayurved is a win-win situation,” Ruchi Soya managing director Dinesh Shahra said. "We have been looking at opportunities to explore optimal use of capacities for crushing, refining and packaging edible oils with various parties.

“We will be able to utilise idle capacities and work with Patanjali to enable them to supply quality refined oils to the Indian market."

Patanjali Ayurved currently supplies a range of consumer goods including food, health care, personal care and herbal care products and ayurvedic medicines.

Ruchi Soya chief operating officer Satendra Aggarwal said the agreement with Patanjali Ayurved would cover the processing and packing of soya, sunflower and mustard oils at Ruchi’s plant in Baran, Rajasthan.

"In the near future, the processing and packing will be extended to other locations and will include more varieties of edible oils as well. The tie-up will help us to improve capacity utilisation and enhance productivity, efficiency and profitability," he said.

The Economic Times said Ruchi Soya had the largest edible oil refining capacity in India of 3.3M tonnes/year across 13 facilities.

The company is the leading manufacturer and marketer edible oils, soya food, premium table spreads, vanaspati and bakery fats in the country with leading brands including Nutrela, Mahakosh, Sunrich and Ruchi Gold oils.

* Ruchi Soya posted losses of INR1.89bn (US$26.9M) for the first nine months of its financial year to the end of December, compared to a profit of INR1.31bn a year earlier, attributed to a drop in sales and the effects of demonetisation, reported just-food on 15 February.

The Indian government announced on 8 November 2016 that all 500 rupee (US$7.40) and 1,000 rupee (US$15) banknotes would be invalid and replaced with new a series of banknotes to crack down on the use of counterfeit cash.

Ruchi Soya managing director Dinesh Shahra said demonetisation had caused short-term liquidity problems and delays in procurement from farmers but would be beneficial in the longer term by lowering unfair competition from the unorganised sector.

For the nine-month period to the end of December, Ruchi Soya generated revenue of INR151.61bn, down 23.8% from the previous year, and posted a profit from operations before ‘other’ income, finance costs and exceptional items of INR3.16bn, down from INR9.67bn the previous year, just-food said.