India's Ruchi Soya to start palm oil plantations in North East
Caption: Workers are Ruchi Soya’s Plant
Kolkata: Yoga guru Baba Ramdev's Patanjali group led Ruchi Soya plans to start palm oil plantations in Assam, Tripura and other North-Eastern states. The oil processor which was taken over by the Patanjali group two years back after it slipped into the red has already done field surveys for the palm oil plantations which will be set up through contracts that guarantee farmers a buy-back by Ruchi Soya's processing plants to be set up in those states.
"We plan to set up palm oil plantations in the North East. We have completed our survey there. We have plans for Assam, Tripura, Meghalaya, Manipur among others," said Baba Ramdev, Yoga tele-evangelist who backs the Patanjali business group in an interview with PTI.
"We want to make India self-sustainable in edible oil. The groundwork for the plan has been done. It can be started at any time," Ramdev said.
India currently has patches of palm oil plantations scattered in Assam, Tripura, West Bengal, Andamans, Gujarat, Goa, Andhra, Karnataka, Kerala, Tamil Nadu and Maharashtra.
While Ramdev was unwilling to place a date for the start of the oil plantations, he indicated that it would be done after Ruchi Soya which is in the process of raising funds from investors, retires its debts with the proceeds of a share sale.
He indicated that the plantations to be run by farmers would be backed by processing plants set up by Ruchi Soya, as oil has to be processed within 48 hours of the palm being harvested.
Patanjali acquired Ruchi Soya in 2019 by successfully bidding for the soya oil processor under the Insolvency and Bankruptcy Code. Under Securities and Exchange Board of India's rules, a buyer has to bring down its holding in a firm to below 90 per cent within 18 months of acquisition if public shareholding fell below 10 per cent, while acquiring the target company.
Patanjali Ayurved is consequently selling stake worth Rs 4,300 crore in Ruchi Soya. The money raised through the sale will be used to retire debt, said Ramdev.
Ruchi's planned foray into palm oil comes on the back of a 44.42 per cent increase in palm oil prices in the retail market in July compared to the year-ago period, according to official data given in a written reply to Rajya Sabha last month.
India imports most of its palm oil requirements from South East Asia, despite its home-grown plantations as edible oils are an essential ingredient in the cuisine of this nation of 140 crore people and its appetite for all forms of edible oils has been increasing over the years as per capita incomes go up.
A high rate of import duty on palm oil also makes it attractive to grow locally. India's effective tax rate on crude palm oil is 30.25 per cent despite a recent tax cut.