Patanjali Foods Ltd plans to invest up to Rs 1,500 crore on capital expenditure over the next five years, mostly to scale up its palm oil business, according to company CEO Sanjiv Asthana.
The company (formerly Ruchi Soya Industries) is targeting a turnover of between Rs 45,000-50,000 crore in the next five years as it expands its product offering and distribution reach.
“Our estimate is over five years, we will invest around Rs 1,200 crore to Rs 1,500 crore of capital expenditure…Most of the expenditure will be in years four and five, where we are pushing and the rest in the initial years. We have Adequate capacity and capital expenditure is already earmarked,” Asthana told PTI.
He was replying to a question about the investment plans of the company to meet the growth targets. When asked where the investment would be made, he said, “The bulk of it will be on oil palm.”
On palm oil plantation, Asthana said, “We have about 64,000 hectares of land which is already bearing fruit. It is already a big business for us. We have planted five lakh hectares under the National Mission on Edible Oil.” And committed to take up plantation of oil palm – oil palm in five states of North East namely Assam, Arunachal Pradesh, Mizoram, Tripura, Nagaland.
In South India, he said, “We are already big in Andhra Pradesh, now we are going big ticket in Telangana and Karnataka, and then there are other states like Orissa, Chhattisgarh and Gujarat.
So it’s a huge campaign that we’re running and we’re going to continue to build and grow it.”
When asked about the turnover target, he said, “At present it is more than Rs 31,000 crore and in the next five years it is expected to be between Rs 45,000 crore and Rs 50,000 crore.”
The company expects the new range of premium offerings in nutraceuticals, health biscuits, Nutrela millet-based cereals and dry fruits to play a key role in meeting the five-year target.
“We aim to have around 5 per cent to 10 per cent of the current value offering coming from premium products,” Asthana said.
The company’s Nutrela brand is also being expanded to align with the growth plans.
“Nutrela is a premium offering that we have with various verticals under it. We are building it as an umbrella consumer business orientation having both value and premium offering,” he added.
On biscuits, he said the company has earned a revenue of Rs 1,200 crore.
“This year, our target is above Rs 1,500 crore. We are very confident that we will meet that objective. Going forward, a major part of our share will come on price and a significant part of that is going to come. Premium ( segment), where we are giving healthy options to Patanjali without diluting anything.”
When asked about nutraceuticals, Asthana said that all the products currently available in the market are based on “Western notions about nutraceuticals” and the company is offering an alternative, “which is completely vegetarian and organic”. -Fermented and Healthy Choice for Consumers”.
“We are working in this direction and it is very successful. Last year we did Rs 500 crore in sales and we want to continue expanding and growing,” he said.
In terms of sales network, he said the company currently has over 8,000 distributors with direct access to around 1.5 million retail outlets and is working towards creating an additional one million indirect access.
In addition, the company has access to over 5,000 outlets through Patanjali Ayurveda and its products are also available across all e-commerce platforms, modern trade stores and direct-to-consumer channels through its omni-channel strategy. Build your business. Asthana said.