Ruchi Soya Industries Welcomes Hike in Import Duty on Edible Oils
Ruchi Soya today welcomed the hike in import duty on edible oils announced by the government late last week, accompanied by an increase in the duty differential. The import duty on Crude Palm Oil has been increased from 7.5% to 15%, on RBD palm (refined palm oil) from 15% to 25% and on crude soft oils like soybean oil from 12.5% to 17.5%. The differential duty on import of refined vis-a-vis crude palm oil is now 10% against 7.5% earlier.
Mr. Dinesh Shahra, Founder and Managing Director, Ruchi Soya Industries Ltd. said, “We welcome the increase in import duty on edible oils which is a big positive for organised edible oil players, coming on the heels of GST. The strengthening rupee and low international edible oil prices combined with the earlier duty differential which was favouring import of refined edible oils had led to immense pressure on the domestic industry with many refining facilities on the verge of closure. The increase has come not a moment too soon. This will make domestic refining competitive, in line with the ‘Make in India’ credo as we move towards nutritional security.”
Commenting on the increase in duty differential, Mr. Satendra Aggarwal, COO, Ruchi Soya Industries Ltd. said, “The increase in duty differential from 7.5% to 10% between refined and crude palm oil should bring down the quantum of import of refined palm oil which was swamping the market. This will give an impetus to the domestic refining industry by encouraging import of crude palm oil over refined palm oil.”
Elaborating on the specific impact for Ruchi Soya, Mr. Aggarwal said, “At Ruchi, we foresee a shift from import of RBD palmolein to Crude palm oil with a positive impact on our refining capacity utilisation. Currently, at 45-50%, we see this going up to 65-70%. The increase in capacity utilisation is in turn expected to boost our topline by around 15% on an annualised basis. This will enable us to regain market share of packed oil sales back from importers and traders of refined oil and will also improve our bottomline by 15 to 20%.”
About Ruchi Soya Industries Limited
Ruchi Soya is India’s leading Agri and Food FMCG company with a turnover of USD 3 billion. It enjoys Number 1 position in soy foods category in India and is one of India’s largest players in the cooking oils segment of the country. Its leading brands include Nutrela, Mahakosh, Sunrich, Ruchi Gold and Ruchi Star. An integrated player from farm to fork; Ruchi Soya is also among the pioneers of oil palm plantations in India. It is one of the highest exporters of value added soybean products like soy meal, textured soy protein and soy lecithin. Ruchi Soya has also diversified into renewable energy and is committed to environmental protection as part of its business strategy which reinforces its mission of becoming a truly sustainable company.