About Swasth Foodtech India Limited

Business Overview

Incorporated in 2021, Swasth Foodtech India Limited is engaged in processing and refining rice bran oil, catering primarily to oil manufacturers and packers. The company focuses on producing various grades of rice bran oil, known for its health benefits, including high levels of Vitamin E and Oryzanol, which support heart health. The oil also features a high smoke point and a neutral flavor, making it suitable for diverse cooking applications.

Swasth Foodtech follows a zero-waste manufacturing approach, ensuring that all byproducts, including fatty acids, wax, gums, and spent earth, are reused or sold to industries such as cosmetics, soaps, and animal feed. The company operates a fully automated refining unit made of high-grade stainless steel, designed to ensure efficient extraction and refining processes.

The company markets and sells its bulk rice bran oil to manufacturers, refiners, and wholesalers. Additionally, it plans to use proceeds from its IPO to establish a packaging unit, enabling it to launch its own branded oil products and offer third-party packaging services, specifically targeting small retailers.

Swasth Foodtech operates a manufacturing facility in Purba Burdwan, West Bengal, with a refining capacity of 125 metric tons per day. This location provides easy access to crude rice bran oil, ensuring a consistent supply of raw materials.

Products

1. Rice Bran Oil:

   • Processed from domestically sourced crude rice bran oil.
   • Sold in bulk to manufacturers, refiners, and wholesalers.
   • Provides health benefits due to high Oryzanol and Vitamin E content.

2. By-Products:

   • Fatty acids (used in soap and industrial applications).
   • Wax (utilized in cosmetic and pharmaceutical industries).
   • Gums (used in animal feed and oil processing).
   • Spent earth (recycled for industrial use).

As of September 30, 2024, the company has 17 employees managing its production and business operations.The Bankers to the Company is Axis Bank Limited.

Industry Analysis

Swasth Foodtech operates in India’s edible oil industry, particularly in the rice bran oil segment.

• Global Market Outlook:

  • The global edible oil market is valued at approximately USD 210 billion in 2023, projected to grow at a CAGR of 4.3% (2024-2030).
  • Increasing preference for plant-based oils and healthier alternatives is a major driver.

• Indian Market Overview:

  • India is one of the largest consumers of edible oil, with an industry valued at USD 35 billion.
  • The country imports 60-65% of its oil demand, mainly palm and soybean oil, but government efforts are encouraging domestic oil production.

• Growth Drivers:

  • Rising demand for healthier edible oils with lower cholesterol and higher nutrient content.
  • Government initiatives like National Edible Oil Mission to reduce import dependence.
  • Increasing consumer preference for packaged oils over loose oil sales.

• Competitive Landscape:

  • Major industry players include Adani Wilmar, Ruchi Soya, Cargill India, and Marico.
  • Rice bran oil is gaining popularity due to its health benefits, offering an opportunity for growth and market penetration.
  • Profitability in this sector depends on efficient raw material sourcing and cost-effective refining processes.

Business Strengths

Swasth Foodtech possesses several key strengths that provide a competitive edge:

• Strategically Located Facility:
  • The manufacturing unit in West Bengal is near key rice processing centers, ensuring steady access to crude rice bran oil.
• Modern Manufacturing Capabilities:
  • Fully automated refining plant with stainless steel processing units, ensuring hygiene and efficiency.
• Supply Chain & Institutional Buyers:
  • Strong supply arrangements with institutional oil manufacturers for steady revenue generation.
• Quality Assurance:
  • Strict quality control measures ensure compliance with FSSAI and industry regulations.
• Experienced Management Team:
  • Leadership team with expertise in project execution and business expansion strategies.

Business Strategies

The company has outlined a structured growth plan to expand its business operations:

1. Expanding Production Capacity:
   • Plans to upgrade and modernize existing refining infrastructure.
2. Entering the Packaged Oil Segment:
   • Setting up a packaging unit to launch its own branded rice bran oil.
   • Targeting small retailers and direct consumers.
3. Geographic Expansion:
   • Expanding its distribution network across India and exploring export opportunities.
4. Sustainability & Zero-Waste Policy:
   • Enhancing by-product utilization for industries like biofuel, cosmetics, and animal feed.

Risk Factors and Concerns

Investors should consider the following potential risks before investing:

1. Raw Material Supply Constraints:
   • Availability of crude rice bran oil depends on rice processing mills, making sourcing unpredictable.
2. Regulatory Compliance Risks:
   • Must comply with FSSAI, environmental, and taxation regulations.
3. Market Competition:
   • Larger players like Adani Wilmar and Ruchi Soya may impact pricing and market share.
4. Supply Chain Disruptions:
   • Any delays in raw material procurement or transportation issues can impact operations.
5. Consumer Acceptance for Branded Oils:
   • Shifting from bulk sales to branded retail sales requires effective marketing and distribution strategies.

Swasth Foodtech India Limited is a growing player in the rice bran oil market, leveraging its strategic location, modern facilities, and strong supply chain. With its planned packaging unit and brand expansion, the company aims to capture a larger market share while maintaining a zero-waste, sustainable approach. However, raw material volatility and market competition remain key challenges for its long-term success.