Patanjali Foods Ltd plans to invest up to Rs 1,500 crore in the next five years on capital expenditure, mostly for scaling up its palm oil business, according to company CEO Sanjeev Asthana.The company (formerly Ruchi Soya Industries) has set a target of clocking a turnover between Rs 45,000-50,000 crore in the next five years as it expands its product offerings and distribution reach.
“Our estimation is over five years, we’ll invest about Rs 1,200 crore to Rs 1,500 crore of capital expenditure…Most of the expenditure will happen in year four and five, which is where we are pushing for and the rest in the initial years. We have enough capacity and capex already laid out,” Asthana told PTI.
He was responding to a query on the company’s investment plans in order to meet its growth targets.
When asked where the investments will be made, he said, “A large part of it will be on oil palm”.
On the palm oil plantation, Asthana said, “We have got about 64,000 hectares which are already yielding fruits. That’s a big business for us already. We have committed to do five lakh hectares of further palm plantation under the National Mission on Edible Oil- Oil Palm in five states in northeast — Assam, Arunachal Pradesh, Mizoram, Tripura, Nagaland.”
In south India, he said, “We are already large in Andhra Pradesh, now we’re going big ticket in Telangana and in Karnataka, and then the rest are the other states like Orissa, Chhattisgarh and Gujarat, among others. So it’s a very big campaign that we’re running and we continue to build up and grow that.”
Asked about the turnover target, he said, “As of now it is more than Rs 31,000 crore and in the next five years our expectation is it shall go between Rs 45,000 crore and Rs 50,000 crore.”
The company expects its new range of premium offerings in nutraceuticals, health biscuits, Nutrela millet-based cereals, and dry fruits to play a significant part in meeting the five-year target.
“Our target is that from the current value offering that we have, about 5 per cent to 10 per cent will come from the premium products,” Asthana said.
The scope of the company’s Nutrela brand is also being widened to keep pace with the growth plans.
“Nutrela is a premium offering that we have with the different verticals under it. We are building it up as an umbrella consumer business orientation, that has got both value and a premium offering,” he added.
On biscuits, he said the company has clocked a revenue of Rs 1,200 crore.
“This year, our target is upwards of Rs 1,500 crore. We’re pretty confident that we will meet that objective. Going forward, a larger part of our share will come to the value and a significant part of it is going to come from the premium (segment), where we are giving the healthier options without diluting anything that Patanjali stands for.”
When asked about nutraceuticals, Asthana said all the products currently available in the market are based on “the Western notions of what nutraceuticals are all about” and the company is offering an alternative, “which is entirely vegetarian and organic, bio-fermented and healthier options to consumers”.
“That is what we’re working towards and is very successful. Last year we did sales of Rs 500 crore and we want to continue expanding and growing that,” he added.
In terms of sales network, he said currently the company has 8,000-plus distributors with about 1.5 million direct reach to retail outlets and is working towards having an additional indirect reach of close to a million outlets.
Besides, the company has access to more than 5,000 outlets through Patanjali Ayurved and its products are also available across all the e-commerce platforms, modern trade stores and direct-to-consumer channels through its omni-channel strategy to build up its business, Asthana said.