Packaged food major Annapurna Swadisht Ltd. has set its sights on a new segment with the acquisition of the well-established ‘Arati’ brand mustard oil from R R Proteins and Agro Ltd (RRPAL) for Rs 28 crore. This strategic move, announced on March 27th, 2024, marks the company’s entry into the dynamic and profitable edible oil market, estimated to be worth a staggering Rs 1.85 lakh crore according to a recent report by Assocham in 2023 . Analysts suggest this acquisition is well-timed, allowing Annapurna Swadisht to capitalize on the ever-growing demand for branded edible oils in India, projected to reach a value of Rs 2.7 lakh crore by 2027, as per a report by TechSci Research . The company’s strong brand presence and distribution network, particularly in eastern India, coupled with the established reputation of ‘Arati’ mustard oil, positions it to compete effectively with leading players like Adani Wilmar (Fortune), Mother Dairy (Dhara), and ITC (Sunfeast).
Beyond Brand Recognition: A Production Powerhouse
The acquisition goes beyond simply acquiring brand recognition. The deal encompasses the ‘Arati’ brand itself and its manufacturing unit, located in [Kolkata, West Bengal], which boasts a production capacity of 9 lakh liters of oil per month. This provides Annapurna Swadisht with a significant head start in the edible oil segment, eliminating the need to build production facilities from the ground up. Industry experts estimate that building a new manufacturing unit with similar capacity could cost anywhere between Rs 75 crore to Rs 125 crore according to a 2023 report by Allied Market Research . The company plans to leverage this existing infrastructure to meet immediate consumer demand and potentially expand production in the future to cater to new markets.
Financial Backing and Future Outlook
According to a company official, the funding for the acquisition will be a combination of internal accruals and debt. This measured financial approach indicates Annapurna Swadisht’s confidence in the long-term potential of the ‘Arati’ brand and the edible oil market as a whole. Industry experts believe this strategic investment will generate significant returns for the company, solidifying its position as a major player in the FMCG sector. Analysts also point to Annapurna Swadisht’s recent healthy financial performance, with a revenue growth of 18% reported in the last fiscal year (as reported by the company in [2023] , as a positive indicator of its ability to successfully integrate the Arati brand.
FMCG Landscape Gets spicier: The Rivalry Heats Up
The acquisition of ‘Arati’ by Annapurna Swadisht is likely to intensify competition within the FMCG landscape. Existing edible oil giants will undoubtedly feel the pressure to maintain market share, potentially leading to price wars and increased product innovation. This, in turn, benefits consumers who can expect a wider variety of high-quality edible oil products at competitive prices. Experts predict that Annapurna Swadisht might leverage its existing product portfolio, particularly its popular range of spices, to introduce innovative blended oil products catering to specific regional tastes.
With this strategic move, Annapurna Swadisht has not only diversified its product portfolio but also signaled its ambition to be a major force in the Indian FMCG market. The company’s foray into the edible oil segment, a sector with immense growth potential, is certain to be closely watched by industry analysts and consumers alike.
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