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A JOINT VENTURE subsidiary of Wilmar International is merging some of its functions with Indian consumer goods firm Ruchi Soya to create a new company that will cater to increasing domestic food demand in India.
The joint venture company to be formed between Ruchi Soya and Adani Wilmar - itself a joint venture between Wilmar and Adani Enterprises - will own and manage all procurement, sales and marketing businesses of both parties. Integrating these functions will help both companies reduce costs, and boost efficiency.
It will have the exclusive right to originate, market and distribute finished products from both companies' manufacturing business in India involving oil seeds and vegetables, soya foods, oleochemicals, biodiesel, grains, and castor oil and its derivatives.
The joint venture came about as a response to India's complex agricultural environment, where farm productivity is declining even as consumption increases due to the country's growing population.
"This mismatch can be partially eased by optimising and improving the supply chain networks of Adani Wilmar and Ruchi Soya," both companies said in a statement.
Adani and Wilmar will jointly hold an equity stake of 66.66 per cent in the new joint venture company, and Ruchi Soya will hold 33.34 per cent.