About Vandan Foods Limited
BUSINESS OVERVIEW
Prior to FY 2018, Vandan Foods Company was engaged in the catering business. Between FY 2018 and FY 2023, the company shifted focus to the trading of agro commodities. Since FY 2024, under the active management of the current promoters, the company has entered the manufacturing of Castor Oil and its derivatives.
The company operates on a B2B business model, primarily dealing in Refined F.S.G. Castor Oil and Castor De-Oil Cake.
Castor Oil, a non-volatile fatty oil extracted from the seeds of Ricinus Communis (spurge family), is used in the production of synthetic resins, plastics, fibres, paints, varnishes, and chemicals such as drying oils and plasticizers. It is a viscous, clear to greenish oil with a characteristic odour and a slightly acrid, often nauseating aftertaste.
Extraction is done via pressing or solvent methods. Its applications span cosmetics, hair oils, fungistatic compounds, embalming fluids, printing inks, soaps, lubricants, greases, hydraulic fluids, dyeing aids, and textile finishing materials.
Recognized for its renewability, versatility, and status as the only commercial source of hydroxylated fatty acid, castor oil serves as a critical raw material in the chemical industry. Traditionally, it is also used to treat skin conditions, relieve constipation, and improve hair health.
Product distribution spans multiple states, including Gujarat, Haryana, Andhra Pradesh, Delhi, Bihar, Rajasthan, and Telangana. As on December 31, 2024, the Company has 16 permanent employees. The Banker to the company is Bank of India.
INDUSTRY ANALYSIS
Castor Oil Industry Overview
Indian Market Insights
India holds a prominent position in the global castor oil landscape, not only as one of the largest producers of oilseeds but also as a major exporter of castor oil. Despite this, India remains a major importer of edible oils due to growing domestic demand.
Castor is one of the nine oilseeds cultivated in India, supported by favorable agro-climatic conditions. The Indian castor oil market reached 102.5 Kilo Tons in 2023, driven by rising consumption in pharmaceuticals, cosmetics, lubricants, and agriculture.
Key Growth Drivers
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Demand for Sebacic Acid: A critical derivative of castor oil, sebacic acid is used in manufacturing nylon, plasticizers, hydraulic fluids, and cosmetics. Its anti-corrosive properties make it especially valuable in the lubricants industry.
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Rising Preference for Natural Cosmetics: Castor oil’s growing usage in skincare products, such as moisturizers, anti-aging creams, and acne treatments, is aligned with the increasing consumer shift toward organic and bio-based personal care products.
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Bio-Based Product Adoption: Consumers and governments alike are encouraging the adoption of sustainable and bio-based products. Castor oil’s plant origin and eco-friendly nature make it a strong alternative in industries aiming to reduce chemical use and environmental impact.
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Agricultural Applications: Its use as nutritionally enriched cattle feed due to its antimicrobial properties and high protein content is enhancing its demand in the livestock and poultry sectors.
Industrial Applications
Castor oil is derived from the seeds of Ricinus Communis and is known for its laxative and anti-inflammatory properties. It is widely utilized in:
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Pharmaceuticals – Laxatives, topical medications, pain relief.
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Cosmetics & Personal Care – Skin and hair care formulations.
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Industrial Manufacturing – Lubricants, paints, adhesives, varnishes, and biodiesel.
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Food & Beverage – As a food additive and packaging material.
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Agriculture – In animal feed and pest control.
Regional Outlook
The Asia Pacific region, led by India, dominates global castor seed cultivation. Countries like Thailand, Myanmar, Vietnam, Bangladesh, and Indonesia are expanding commercial production, leveraging tropical climates. Castor leaves, roots, and stems also have economic value—for instance, leaves in silkworm cultivation in China and roots in traditional medicines.
Market Challenges
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Raw Material Price Volatility: Castor oil production is highly sensitive to environmental conditions such as water availability, soil quality, and climate, leading to fluctuating yields and price instability.
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Water Scarcity: Castor cultivation is water-intensive, and inconsistent irrigation in some regions poses risks to consistent supply and farmer profitability.
Opportunities
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Green Cosmetics: The global rise in demand for eco-friendly, non-toxic, and sustainable cosmetic products presents an opportunity for castor oil to gain a larger share of the skincare and personal care market.
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Export Expansion: Increased global demand and India’s production advantage offer growth opportunities for exporters.
Leading Players in the Castor Oil Market
Companies are investing in technological advancements and capacity expansions to meet rising demand and maintain competitive advantage. Major players include:
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Adani Wilmar Ltd
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Jayant Agro Organics Ltd
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Gokul Agri International Ltd
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Royal Castor Products Ltd
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N.K. Proteins Pvt Ltd
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Girnar Industries
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Ambuja Solvex Pvt Ltd
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Sree Rayalaseema Alkalies & Allied Chemicals Ltd
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Sunny Isle
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Itoh Oil Chemicals Co. Ltd
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Globexo India
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Hokoku Corporation, among others.
These companies are profiled based on their product portfolios, strategic initiatives, recent developments, and financial performance.
Conclusion
The castor oil industry is poised for robust growth, supported by multi-sectoral applications, increasing demand for natural and sustainable products, and advancements in extraction technologies. While environmental and raw material challenges remain, the overall outlook remains positive with expanding opportunities in cosmetics, pharmaceuticals, agriculture, and green industrial applications.
BUSINESS STRENGTHS
1. Experienced Promoters and Management Team
The promoters and management team possess extensive industry experience and have played a pivotal role in the company’s operational and financial growth. Their strategic vision and hands-on involvement in daily operations have been instrumental in driving progress. A motivated and skilled team of professionals supports the business with a strong focus on client satisfaction.
2. Quality Control and Assurance
Certified with ISO 9001:2015, the company follows stringent quality management practices in the manufacture of castor oil and castor de-oiled cake. All products undergo pre-dispatch quality testing, with outsourced assessments handled by accredited laboratories equipped with qualified staff. Manufacturing strictly adheres to established quality norms.
3. Diversified Business Model and Customer Base
The company operates a diversified product portfolio including castor seeds, castor DOC, and castor oil, ensuring revenue stability and reduced dependency on any single product segment. A wide customer base across various end markets enhances resilience and supports consistent revenue generation.
4. Scalable Business Model
The customer-centric and order-driven business model supports efficient resource utilization and economies of scale. Business growth is fueled by exploring new domestic and international markets while consistently delivering quality.
5. Stable Operations Through Long-Term Relationships
Long-standing relationships with customers and suppliers ensure steady demand and uninterrupted raw material supply. Repeat business from established clients contributes to strong customer retention and offers a competitive edge in market expansion.
6. Optimal Resource Utilization
Continuous improvement in production processes, employee skill development, and machinery upgrades drive efficient resource utilization. Regular analysis helps identify and resolve operational bottlenecks, improving overall productivity.
BUSINESS STRATEGIES
1. Expanding Geographical Network
Vandan Foods has a presence in Gujarat, Delhi, Haryana, Bihar, and surrounding markets, with manufacturing and storage facilities located in Dhinoj Patan, Gujarat. As of December 31, 2024, the company sold products across more than six states and one union territory, including rural and semi-urban regions. Strategic plans include expanding into under-penetrated geographies by leveraging in-house market analysis and existing distribution networks, focusing on areas with high demand and favorable transportation economics. Expansion will be supported by an enhanced sales and marketing team to strengthen regional presence and customer engagement.
2. Commitment to Quality Standards
The company prioritizes strict adherence to product quality, maintaining rigorous control throughout the production process. Continuous monitoring and prompt corrective actions ensure consistency, durability, and customer satisfaction, fostering long-term relationships.
3. Strong Stakeholder Relationships
Sustained growth is driven by cordial relationships with suppliers, customers, and employees. Reliable delivery and a dedicated service approach have helped build trust with long-standing customers. Strategic alliances with suppliers enhance supply chain efficiency and support business scalability.
4. Enhancing Operational Efficiency
Operational efficiency is increased through process improvements, technological upgrades, and employee skill development. Aligning workforce initiatives with performance goals contributes to higher output, better customer service, and cost efficiency, resulting in improved profit margins
BUSINESS RISK FACTORS & CONCERNS
1. High Revenue Concentration in Gujarat
A substantial portion of the company’s revenue is derived from the state of Gujarat, contributing 92.62% (Dec 2024), 87.63% (FY 2024), 93.53% (FY 2023), and 80.70% (FY 2022). Any adverse economic, regulatory, or market developments in this region could significantly impact the company’s business operations and financial stability. Reduced spending by customers in this geography may also negatively affect revenues.
2. Volatility in Raw Material Prices
The cost of production is heavily influenced by fluctuations in the price of Castor Seeds, the primary raw material for manufacturing Refined F.S.G. Castor Oil and Castor De-Oiled Cake. Castor seeds are sourced from the domestic market without long-term supply agreements, exposing the company to price volatility and potential margin pressures. The ability to pass on increased costs to customers may be limited, impacting profitability.
3. Operational Risks Linked to a Single Manufacturing Facility
Operations are concentrated in two adjacent manufacturing units in Dhinoj Patan, Gujarat, with a limited product line. The business is exposed to various risks including equipment breakdown, industrial accidents, natural disasters, and planned maintenance shutdowns. Any major disruption to the manufacturing assets may lead to significant repair costs, delays, or suspension of operations, adversely affecting financial performance.
Vandan Foods faces key business risks arising from geographic revenue concentration, raw material price volatility, and operational dependency on a single manufacturing unit and limited product range. These factors collectively expose the company to financial and operational uncertainties.
