Packaged food company Annapurna Swadisht Ltd announced its acquisition of the six-decade-old ‘Arati’ brand mustard oil from R R Proteins and Agro Ltd (RRPAL) for a consideration of Rs 28 crore. This strategic move will enable Annapurna Swadisht to foray into the edible oil segment and strengthen its Fast-Moving Consumer Goods (FMCG) portfolio.
The estimated amount of Rs 28 crore includes the cost of acquiring the manufacturing unit and the brand itself. The funding for the deal will be a combination of internal accruals and debt.
RRPAL, with a production capacity of 9 lakh litres of oil per month, offers a significant opportunity for Annapurna Swadisht to enter a new business vertical. The Managing Director of Annapurna Swadisht Ltd, Shreeram Bagla, expressed confidence in this acquisition aligning well with the company’s overall strategy of becoming a formidable player in the packaged food industry, especially in semi-urban and rural markets.
Annapurna Swadisht Ltd plans to leverage its existing distribution network in tier III, IV, and V towns in eastern and northeastern markets to boost sales of the ‘Arati’ brand mustard oil. They aim to achieve this by offering low-priced consumer packs at Rs 10 and Rs 20, which have seen growing demand in these regions. ASL currently manufactures snacks and beverages, offering around 75 SKUs across 10 broad categories.