FMCG company Ruchi Soya Industries today signed an agreement with Japan’s Kagome and Mitsui to set up a joint venture (JV), RuchiKagome, to manufacture tomato products in India.

“Currently the total annual demand for processed tomato in the country is two lakh tonnes. We are planning to launch a range of tomato products along with Kagome,” Dinesh Shahra, Managing Director and Founder of Ruchi Soya said.

The company is looking to gain about 20 per cent market share in this segment in the next five years.

Ruchi Soya will have 40 per cent stake in the JV and the rest will be held by a special purpose company (SPC) created by Kagome and Mitsui. Kagome and Mitsui own 66.7 per cent and 33.3 per cent stakes respectively in the SPC.

RuchiKagome will set up a manufacturing unit in Maharashtra with initial investment of Rs 44 crore and the commercial production will begin from June 2014, Shahra said.

The company is planning to procure tomato directly from the farmers in the western region, he said.

In the first phase, RuchiKagome will target business-to-business model in markets in and around Mumbai, NCR and Bangalore and is expecting Rs 340-crore revenue, then it would move to the business-to-consumer, he said.

“We will also look into exporting our products to countries where our JV is present. However, our initial focus will be on the domestic market,” he said.

India is the second largest tomato producer in the world with 17 million tonnes production annually after China.

Kagome is a leading tomato product company in Japan and supplies food and beverage products in 50 countries.

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