Ruchi Soya forms joint venture to step up seed yield

India’s FMCG companies Ruchi Soya Industries recently entered into a joint venture with D. J. Hendrick International Inc. (DJHI), a Canadian soyabean research company, and KMDI International, a Japanese trader and marketer of food-grade soyabeans, to increase the yield of soya seeds in India.

While Ruchi Soya will hold 55 per cent stake in the joint venture, DJHI and KMDI will hold 35 per cent and 10 per cent, respectively.

Addressing the media, Ruchi Soya Chairman and Managing Director Dinesh Shahra said, “We will invest equity of Rs.18 crore for the first three years. It is a research-driven project, and we are still to identify the quantum of capital required.’’

DJHI will bring in its global breeding, processing technology and knowledge to the Indian market, while KMDI International will provide its global network and establish sound internal controls for the joint venture.

Despite being the world’s fifth largest producer of soyabean (at around 12 million tonnes), India’s productivity of just 1.017 tonne of soyabean per hectare is less than half of the global average of 2.5 tonnes. It is a net importer of soyabean oil — importing about 1.2 million tonnes annually. Ruchi Soya’s capacity of 4 million tonnes is a quarter of India’s capacity.

“The joint venture plans to reduce import dependency by improving the oil content in domestically grown soyabeans,’’ Mr. Shahra said, adding that, “the pace of consumption of soyabean oil is much faster than local production, and action needs to be taken.’’

He added that the joint venture planned to “widen crop management practices for different soyabean types tailored for varied agro-climatic zones to improve yield. The R&D will provide a germplasm with desired traits.

While North and South America use genetically modified (GM) soyabean, Europe, Japan, the U.K, and Australia have banned it. “The joint venture will solidify India’s position as a top non-GM producer and open the doors for exports,’’ Mr. Shahra said.