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Emami to invest Rs 1,000 cr to boost edible oil biz

After buyouts of Kesh King & Rasoi, it is looking to buy assets in the space

(From left) Sudhakar Desai, CEO, Emami Agrotech Ltd and Aditya V Agarwal, Director, Emami Group at the launch of Emami Healthy & Tasty edible oil in Mumbai (Photo: Suryakant Niwate)

Arnab Dutta New Delhi

Last Updated : Apr 07 2017 | 12:29 AM IST

The Kolkata-based Emami Group, which has interests in fast-moving consumer goods to real estate, will invest Rs 1,000 crore over the next few years to ramp up its edible oil business. It has allocated Rs 800 crore to build three manufacturing units in Jaipur (Rajasthan), Kandla (Gujarat) and JNPT (Maharashtra). The rest will be spent on advertisement and promotion of its premium brand — Healthy and Tasty, said Aditya Vardhan Agarwal, director, Emami Group.

Currently, Emami produces soybean, sunflower, rice bran, palm and mustard oils in its two plants located in Haldia (West Bengal) and Krishnapatnam (Andhra Pradesh) and has total capacity of 5,000 tonnes a day. However, the three new plants will be crucial for the company to cater to large markets in the northern and western parts of the country. Emami currently procures edible oil from a third-party manufacturer in Jaipur.

While its plant at Kandla will be operational in 15 months, the Jaipur unit is expected to be up in the next four months. Locations of the two plants at Kandla and JNPT had been chosen due to their proximity to sea ports as import of raw material is a necessity in edible oil business, Agarwal said.

“We are eyeing Rs 10,000-crore annual sales from this business in the next two years. To expand our business, we taking our premium brand, Healthy and Tasty, pan-India,” he said. Emami expects to generate Rs 5,000-crore sales under the brand. Currently, its edible oil business generates nearly 95 per cent of Rs 6,000-crore revenue for Emami Agrotech. The rest comes from bio-diesel.

To promote its pan-India expansion, it has roped in film actor Amitabh Bachchan and has allocated Rs 200-crore budget for the next three to four years. “Only 30 per cent of the edible oil market is served through packaged oil. So, the scope for growth is immense,” Agarwal said, citing AC Nielsen data. According to him, Emami is open to acquisitions in the edible oil space.