KS Oils to develop palm oil plantations in Indonesia

K S Oils, a leading edible oil FMCG company, has acquired an additional 53,000 acres for developing palm oil plantations in Indonesia through its wholly-owned Singapore subsidiary, K S Natural Resources Pte Ltd (KSNR).

This gives KSNR a total of 138,000 acres that should yield 215,000 tonnes of crude palm oil which is about four per cent of India’s total palm oil requirement and 60 per cent of KS Oils own requirement.

According to sources, the funding for this project will be done through internal accruals and debt at the subsidiary level. The total funds required for the new project would be about Rs 380 crore over the next three years, sources said.

Last year, the company had acquired a refinery in East India for Rs 125 crore.

The acquisition of land in Indonesia, according to company sources, is in line with K S Oil’s strategy of becoming an integrated edible oil player in South Asia and a leading FMCG player in India. Palm oil is the most consumed edible oil in India. The country’s per capita consumption, which has risen this financial year by nearly 15 per cent so far, has been met through higher imports.

The imports of edible oil have reached nearly 7.5 million tonnes in the current oil year till September 2009, compared with 5.6 million tonnes for the whole of last year.

With palm oil being the most consumed oil by Indian consumers, KS will offer refined palm oil under its brands. K S Oil has brands Kalash, Double Sher and K S Refined. These umbrella brands will be used to sell refined palm oil products from the KS stable.

The company’s managing director Sanjay Agarwal confirmed the acquisition but refused to discuss further details.