SOYBEAN INDUSTRY IN INDIA

Ranjan Kotian
Consultant - India
2008
Contents

Soybean – An understanding

Industry Profile

Target Potentiality (Deleted)

Deal Street

1
Soybean – An Understanding
Soybean
• The soybean (U.S.) or soya bean (UK) (Glycine
max) is a species of legume native to East Asia
• A cream-coloured oval bean about the size of a
common pea
• Soybeans are grown primarily for meal, and oil
is a secondary product
• During processing, the soybeans are cracked to
remove the hull and then rolled into full-fat
flakes. The rolling process disrupts the oil cells,
facilitating solvent extraction of the oil. After
the oil has been extracted, the solvent is
removed, and the flakes are dried, creating
defatted soy flakes. While most of the defatted
soy flakes are further processed into soybean
meal for animal feeding, the flakes can be
ground to produce soy flour, sized to produce
soy grits or texturized to produce textured
vegetable protein (TVP) for food uses.

3
Origin and Spread of Soyabean
• Soybean production was localized in China until after the Chinese-
Japanese war of 1894-95, when the Japanese began to import
soybean oil cake for use as fertilizer
• Europeans had been aware of soybeans as early as 1712 through the
writing of a German botanist
• Some soybean seed may have been sent from China by missionaries
as early as 1740 and planted in France
• Shipments of soybeans were made to Europe about 1908, and the
soybean attracted worldwide attention
• The soybean was a recent introduction to India, probably introduced
into India from China, Japan and South east Asia via the Naga Hills
and Manipur, at the far eastern tip of India
• In India Soybean cultivation is introduced in 1977
• Production of soybean in India at the present time is restricted mainly
to Madhya Pradesh, Uttar Pradesh, Maharashtra and Gujarat
• It is also grown on a small acreage in Himachal Pradesh, Punjab and
Delhi

4
Soybean Value Chain

Level 1 Level 2 Level 3

Green Soybean Dried & Extracted Soybean Crushed & Processed Soybean

Vegetable Soy Oil, Soy Milk, Soy Dal Soy Meal, Soy Curd, Soy Flour

5
Soybean – Golden Bean of 20th Century
• Soyfoods are a source of high Quality Protein
• In 1999 The Food & Drug Administration (FDA) announced that food containing soy protein may reduce
the risk of coronary heart diseases
• Soybean is viewed as alternative HRT [Hormone replacement therapy (menopause)] in large part because
it is a unique natural source of Isoflavones
• Soy food such as Tofu, Soy Milk, Soy Flour and Soy Nuts have isoflavones contains of about 37 to 180 mg
per ounce
• Soybeans have favourable nutrient profile for heart health, decreasing negative effect of menopause,
reduction of cancer, Dibetes, kidney diseases and allergies
• According to FDA, Soy proteins lowers the serum Cholesterol; Soyfood provide high quality protein
without saturated fat and cholesteroal
• Soy food contains anti-carunogens that have proved to be protective against cancer
• Recent Clinical trials have shown that consumption of soy protein compared to other proteins such as
from milk or meat can lower total LDL(Low-density lipoprotein) -cholesterol level

Major constituents of Soybean

6
Industry Profile
 Global Scenario
• Soybean is one of the major oilseed World Soybean Production
crops in the world

Quantity in Million Tonnes

250

236.05
• It is cultivated extensively in south

221.62
220.56
215.72
200

186.53
Asian countries and U.S.A.
150

100

• Account 57% of total oilseed 50

production in the world 0

2003-2004

2004-2005

2005-2006

2006-2007

(Projection)
2007-2008
• 85% of the world’s production is
crushed for oil Years

• oil recovery is 17-18%

Major Soybean producing Countries
• the meal forms around 80%
• Major players include:
• Ruchi Soya (India)
• J-Oil Mills Inc (Japan)
• Cargill Inc (Belgium)
• Heilongjiang Jiusan (China)
• Bunge (US)
• Bianchini SA Indústria (Brazil)

8
Global Soybean Crop Calendar

Indian Soybean Crop Calender

• Mainly grown in Kharif season – Monsoon
• Sowing – June – July
• Harvest – October – December

9
Global Supply Demand Estimates
• The global trade of soybean meal is about 48 million tons
• The leading soybean meal producing country is US in the 1st
place and China, Brazil in the 2nd & 3rd place respectively
• The leading soy meal exporting countries are: -
• Argentina (20 million tons)
• Brazil (15 million tons)
• USA (6 million tons)
• India (4 million tons)
• European Union (2 million tons)
• The major importers of soybean meal are: -
• European Union (22 million tons)
• Central Europe (3.5 million tons)
• Thailand (2 million tons)
• South Korea (1.5 million tons)
• Indonesia (1.5 million tons)
• Japan (1 million tons)
• Philippines (1 million tons)
• Canada (1 million tons)
10
Indian Scenario
• India is 5th largest producer of soybean in the world, with average
production of 4,809 TMT (Thousand Metric Tonnes) of soybeans
• Average consumption in India is 4,812 TMT of soybeans
• India presently produces about 6 MMT (Million Metric Tonnes) of
soybean per annum
• Soybean output has more than doubled in the last 10 years
• is expected to reach a level of 8.6 million tons in 2007-08, making available
around 6.2 MMT of Soybean Meal with 4 MMT for exports
• With current international prices as high as US $300+ per MT, exports of
Indian Soymeal earning close to US$ 1 billion or over Rs.4000 crores
• Uses –
• Seeds are eaten whole, split & spouted
• Oil used for paints, linoleum, oil cloth, printing inks, soap, insecticides,
disinfectants apart from culinary
• Meal (remnant after oil extraction), Soya Flour, Soya Milk, Soya curd, tofu
(Soya Paneer)

There are intellectual property rights (IPR) issues in soybean. Genetically Modified (GM) soybean may not
be viable for India unless the IPR issues are addressed through appropriate models as in say, Brazil
11
Soybean Growing Areas in India

According to a statement from the ministry of agriculture in New Delhi on Friday, the area under
cultivation for soybean crop increased from 8.7 million hectare in 2007 to 9.5 million hectare this year

12
Soybean Cultivation & Production in India

Source: Multi Commodity Exchange of India Ltd

Soybean output has more than doubled in the last 10 years and is expected to reach a level of 8.6
million tons in 2007-08, making available around 6.2 MMT of Soybean Meal with 4 MMT for exports.
With current international prices as high as US $300+ per MT, this year would well turn into a record year
of highest ever exports of Indian Soymeal earning close to US$ 1 billion or over Rs.4000 crores.
13
India in World Soy Industry
• India is one of the major exporters of soy meal to the Asian countries
• South Korea, Thailand, Philippines, Japan are some of the major
importers of soy meal from the country
• Soy meal accounted for 84% of the total edible oilseed meal exports
from the country

India World % Share

(Rounded figs.)
(In million tons)
Annual Seed Production 6 180 3
Annual Oil Production 1 30 3.3
Annual Oil Imports 1.5 9 16.7
Annual Oil Consumption 2.5 30 8.3
Annual Meal Production 3.5 130 3.5
Annual Meal Exports 2.5 43 5.8
Annual Meal Consumption 1 130 0.7

Major Concern
• The industry is exposed to price fluctuations on its major raw material
• Government policies play an important role in the edible oil and oil seed sector
14
Country wise Trade Profile

15
Soy Meal* Export from India
* Soya bean meal is the residue after oil extraction out of soya seeds

(Units in MT)

Source: Multi Commodity Exchange of India Ltd

16
Soybean - Price Movement

Source: Multi Commodity Exchange of India Ltd

17
Soy Oil Import into India

Source: Multi Commodity Exchange of India Ltd

18
Potential of Soy Bean, Soy Oil and Soy Meal
• India, a country with a large population, is experiencing rapid
income growth
• Approximately 2/3rd of India’s population is vegetarian, much
of the increase in protein consumption is expected to come
from a non-meat source
• Consistently rising domestic demand for edible oil in general
and Soy Oil in particular leading to higher imports
• Higher crush capacity utilization in the industry
• Lower crop estimate but higher demand projection for Soy
Bean in China
• Increased Soy Meal demand from Far East due to reduced
crush in China and Japan
• Recovery of domestic and global poultry industry from avian flu
resulting in revival of demand for feed, thus benefiting Soy
Meal manufacturers; and
• Rising demand for bio-fuels
19
Indian Soybean Market – Way Forward
• Indian Soybean market is worth over US$ 1.11 billion or INR 5,000
crores
• India is an importer of Soy oil but exports Soy meal which is
considered to be one of the premium soy meals among European and
Asian countries
• India’s Soy meal exports are expected to cross 50,00,000 tonne mark,
which is 45 per cent ahead of last season’s (Oct 2007 – Sept 2008),
estimated at US$ 1.64 billion or INR 7,000 crores
• India export approximately 65% of the total soy meal produced and
has turned out to be one of the largest exporter of soy meal usually to
the Asian countries
• Encouraged by the current export trend, the Solvent Exporters
Association is planning to send a delegation to Cambodia and other
Far-Eastern nation to further strengthen the hold on the markets there
• Advantages of Indian Soya in world market
• price advantage as Indian soy meal is still cheaper when compared with the
American or Brazilian soymeal
• No other country produces cheaper soy meal than India, which contains
high protein content of around 48%
• Only India supplies non-GM soy meal while the U.S., Argentina and Brazil
manufactures only/ mainly GM soya meal.
20
Players in Soybean Industry

Soybean seed
• Monsanto India
• Mahyco
• Eagle Seeds & Biotech

Soybean processing
• Ruchi soya
• Adani Wilmar
• Gokul Refoils & Solvent
• Liberty Oil Mills
• Vippy Industries
• Sanwaria Agro
• Murli Industries
• Dewas Soya

21
Deal street
Deals in Soybean industry

DEAL VALUE
Year ACQUIRER Target (US $ mn)

Mac Oil Palm Limited (palm oil unit of SICAL

2007 Ruchi Soya Industries Limited Logistics Ltd) 7

soya processing,edible oil and vanaspati

businesses of Madhya Pradesh Glychem Industries
2006 Ruchi Soya Industries Limited Ltd N.A.

2004 Ruchi Soya Industries Limited Aneja Solvex Pvt Ltd N.A.

2002 Marico Industries Ltd Meal Maker brand from Plastomech Ltd 0.5

Desmet Chemfood Engineering from Extraction De

1995 Ruchi Soya Industries Limited Smet NV N.A.

# Only RUCHI SOYA looks to be active in Deal Street

23
Sources of Information:

 National Research Centre for Soybean

 Multi Commodity Exchange of India

 Wikipedia

 Company websites

 Newspaper articles

 Company research reports

24
 THANK YOU

This material, prepared contains, general information only. This material is not a substitute for such professional advice or services, nor should it be used as
a basis for any decision or action that may affect your finances or your business. Before making any decision or taking any action that may affect your
finances or your business, you should consult a qualified professional adviser. The presenter shall not be responsible for any loss whatsoever sustained by
any person who relies on the content of this material.

25