As part of its inorganic growth strategy, Ruchi Soya Industries, makers of Nutrela, is scouting for acquisitions in overseas markets to extend its brand portfolio. Dinesh Shahra, managing director of Ruchi Soya Industries, is putting in place the company’s organic growth plans to fight competition in domestic markets. To start with, the company is setting up a new research and development centre in Mumbai for a foray into new categories. The $2.5-billion Ruchi Soya Industries, part of the Ruchi Group, is currently present in three categories which include, edible oil, protein foods and soya bean processing. In an exclusive interview with Lalitha Srinivasan, Shahra talks about the company’s growth strategy. Edited excerpts:

Why are you only looking for overseas acquisitions?

We are focusing at acquisitions in African markets, West Asia and Bangladesh to extend our global foot print as well as our brand portfolio. We are not keen for acquisitions in the domestic market as we already have our homegrown brands to build on. Currently, we are exporting our products to the US, South East Asia, West Asia and European markets. We now plan to export our brands to African markets such as Zambia, Ethiopia and Ghana.

What are your organic growth plans in the domestic market?

We are planning to increase our distribution network and manufacturing capacities in the next two quarters. With the launch of cold storage system for our new launch, Nutrela Margarine, we are streamlining our distribution. We are also making fresh investment in our R&D projects. We are setting up R&D centres in Mumbai and south India. Currently, we have an R&D centre in Indore. We plan to foray into functional edible oils with health benefits in the next few months.

How will you strengthen presence in modern trade channels?

For our flagship brand, Nutrela, we acknowledge the growing importance of ‘premiumisation’ and ‘easy accessibility’ in modern retail formats. Hence, we now partner with many modern retail chains to improve visibility. We are hosting ground activations and experiential marketing within stores to generate shopper trials and create brand salience. Through our research project, we learn that promotion activities play an important role in modern trade channels. So we plan to run consumer engagement promotions tailor made for specific chains and locations.

How do plan to accelerate your rural penetration?

Currently, our direct coverage is till tier four towns across the country. The launch of smaller SKUs (90gm) for soya chunks and granules has enabled us to widen our reach across geographies. We participate in haats and melas wherein we demonstrate the benefits of soya products through cookery classes along with other consumer engagement programmes.

What are your ad and marketing plans to take on rivals?

We will lay more emphasis on television and print advertising to promote our functional oils and premium packaged food brands. Ogilvy & Mather India will design new mass media campaigns. We have entered the social media space to promote our brands. We have a presence in Facebook, where we host cooking competitions to woo consumers. At present, our distribution network includes 6,208 distributors and 5,86,500 retail outlets across the country.

Ruchi Soya had posted a 17.5% increase in its net sales at R8,175 crore in Q3 FY13. Will you be able to sustain this growth?

With improved branded sales, better sales realisation of oilseed extraction, effective control on the costs and favorable business sentiments, we posted sales growth in Q3. We are striving to deliver good performance on a sustained basis in the next four quarters.