Gujarat edible oil firms in expansion mode

Vimal Oil and Foods, one of the leading edible oil producers in the country, is setting up a greenfield unit for manufacturing blended edible oils at Mehsana. The new unit will have a refining capacity of 100 tonnes per day (TPD) which will come up at its existing facility at Mehsana.

"We hope to start production at this unit soon," said Jayesh Patel chairman and managing director, Vimal Oil and Foods.

Gokul Refoils and Solvents is yet another edible oil player which is rapidly expanding its production capacity. Recently, Gokul Refoils raised money from the capital markets to fund its expansion plans. The Ahmedabad-based company raised the money to set up a new 1,500 TPD soybean processing plant near Gandhidham involving an investment of Rs 51 crore.

The Red Herring Prospectus of the company filed with the Securities and Exchange Board of India (Sebi) also states the company's intention to increase the refining and processing capacity of its existing refinery at Surat from 100 TPD to 400 TPD.

Apart from this, the company, which recently got listed on the bourses, is in the process of setting up a edible oil refinery at Haldia in West Bengal. Adani Wilmer, the largest exporter of edible oil from India, has also sought necessary clearances from the Centre for manufacturing soybean, groundnut, palm, sunflower, safflower, cottonseed and rapeseed oil at Kutch in Gujarat.

Saurashtra-based Rs 300- crore Kanerial Oil Industries too plans to take up expansion projects in the near future. "We are also looking at increasing our processing and refining capacity. We may come up with a greenfield unit. However, we have not yet finalised details of the expansion project," Suresh Kaneria, chairman, Kanerial Oil Industries told Business Standard.

Growth in demand seems to be a driving force for companies to augment their production capacities.

Import duty cut on edible oil is another reason for expansion. The total consumption of edible oil in India was 1.20 crore tonnes last year, of which 60 lakh tonnes is imported to India, he said.

"Increase in the population is gradually fueling the consumption of edible oil in the country," said Vimal Oil's CMD Jayesh Patel. According to the industry players, the market for loose edible oil is growing at average annual rate of 6 per cent, while packed edible oil segment is growing at 13 per cent.