Ruchi Soya, the India-based edible oil supplier, has struck another packing deal with local consumer goods group Patanjali Ayurved.
The companies, which announced their first agreement in February, has announced a second contract centred on “large packs” – oil sold in five-litre packs and above.
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The first deal focused on smaller, so-called “consumer” packs and a narrower range of oils. It also saw Ruchi Soya act as a packer only; the latest, exclusive agreement will see the company also distribute the larger products.
“Large packs are mostly used by restaurants, cafes etc. but consumers also buy large packs – households with a lot of family members,” a spokesperson for Ruchi Soya said. “Ruchi Soya has an exclusive arrangement at this point with Patanjali only for large packs, not consumer packs as far as edible oils are concerned.”
In a statement, Ruchi Soya managing director and CEO Dinesh Shahra said: “This agreement will further lead to better utilisation of Ruchi’s manufacturing capacity and significantly contribute to cost-efficient operations and augment profitability.”
Satendra Aggarwal, Ruchi Soya’s COO, said Patanjali is eyeing sales of INR20bn (US$307.4m) by 2020 from its edible oils range of which large packs will constitute a substantial portion.”
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By GlobalDataAggarwal suggested there would be no overlap between Patanjali’s edible oil brands and those in the Ruchi Soya portfolio. “The edible oil brands of Patanjali and Ruchi Soya – like Mahaksoh and Sunrich – operate in premium and popular segments respectively and hence are non-competitive.”
