Amid subdued overseas markets, especially South East Asian countries like Vietnam, Indian groundnut exporters are turning to domestic retail businesses such as peanut products including peanut butter and confectioneries. Players like Agrocrops Exim Limited and others are looking to enhance exports even as they diversify into domestic retail.
"Value addition in groundnut is happening in a small way, but is gradually increasing as demand in domestic as well as international market is growing. Some leading exporters have shown interest in it. As it is an untapped area, there is huge potential for value-added peanut products," said an official of Agricultural and Processed Food Products Export Development Authority (Apeda).
According to Apeda, with export of groundnut on the decline, some of the bigger exporters may enter in this business in the near future.
Tamil Nadu-based Agrocrops Exim Limited, a leading groundnut exporter, is currently expanding its processing capacity by setting up new processing units across producing states such as Gujarat, Rajasthan, Andhra Pradesh, Orissa, Tamil Nadu and Karnataka. After this expansion, the company will start producing peanut butter and other confectioneries.
Saravanan Lokasundaram, chief executive officer of Agrocrops Exim said, "We are planning to set up seven processing and grading units in the groundnut producing belt. The company will invest about Rs 175 crore and is also considering entering the retail segment with value-added peanut products."
Agrocrops Exim's plant, which the company claimed is India's largest processing unit with a daily capacity of 480 tonnes, will be operational in April this year. Two units in Tamil Nadu, one unit in Rajasthan and Orissa will be operational by end of this year.India is the second largest producer of groundnut in the world after China. The country produces about five to six million tonnes groundnut every year and exports around 500,000 tonnes a year.