Annapurna Swadisht set to enter edible oil market with acquisition of branded mustard oil

Packaged food manufacturer Annapurna Swadisht is set to enter the country’s  ₹3-lakh crore edible oil market with the acquisition of a branded mustard oil.

The Kolkata-based company, which currently manufactures snacks and beverages, signed an agreement on Wednesday to acquire “Arati” branded mustard oil from R R Proteins and Agro (RRPAL).

“The estimated cost of acquisition, which includes payment for the manufacturing facility and the brand, is upto ₹28 crore and aligns closely with the net assets acquired through this deal. The transaction will be funded partly by internal accruals and partly by debt, subject to approval by the board,” Annapurna Swadisht (ASL) said in a statement, adding the brand has a strong recall value in the urban markets of West Bengal.

Aligning with strategy

Commenting on the acquisition, Shreeram Bagla, Managing Director of ASL, said, “We believe this acquisition presents an exciting opportunity that aligns well with our company’s overall strategy of strengthening our presence as a formidable player in the packaged food industry in semi-urban and rural markets of India.”

The company plans to leverage its existing distribution network in tier-III towns and beyond in eastern and north-eastern markets to increase sales of Arati brand mustard oil.

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“We expect the acquisition to boost our revenues and improve our profitability going forward,” Bagla said. For the half-year ended September 30, 2023, ASL had revenues of ₹131 crore.

The company said this investment was in line with its strategy to strengthen its presence in the packaged food industry. It currently manufactures snacks and beverages and offers approximately 75 SKUs across 10 broad categories. The company’s products are available at over six lakh retail touchpoints primarily in Tier-III and -IV markets of Bihar, Jharkhand, West Bengal, Assam, Odisha and Uttar Pradesh.

Ritesh Beriwal, MD of RRPAL, said, “We believe this association will further strengthen the Arati brand, which we have nurtured over the past six decades, and help expand its presence in the semi-urban and rural markets of West Bengal and other eastern and north-eastern states.”

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