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Emami Agrotech investing Rs 700 crore to increase manufacturing capacity

In the last fiscal year, Emami Agrotech reported a revenue of Rs 12,000 crore led by the edible oils business

Avishek Rakshit  |  Kolkata 

Domestic edible oil
Domestic edible oil. Photo: Reuters

Emami Agrotech, part of the Emami Group, will invest around Rs 700 crore to scale up its edible oil manufacturing capacity from 6,000 tonne per day (tpd) to 10,000 tpd by the end of the next year.

Banking on increased production capacity, the company is targeting to double its revenues in the next three years from Rs 12,000 crore as on March 31, 2019 to around Rs 25,000 crore.

In the Kandla port of Gujarat, where it is setting up a greenfield project to make edible oil, around Rs 500 crore is being invested which can roll out 2500 tpd of oil while another Rs 200 crore is being invested to increase the installed capacity of its plant at Haldia in West Bengal from 3,500 tpd to 5,500 tpd.

The company has finished a brownfield expansion of its Krishnapatnam plant in Andhra Pradesh, where it spent Rs 250 crore to up the capacity from 1,200 tpd to 2,500 tpd.

“Post completion of these ongoing projects, the total installed capacity of the edible oil business will be around 10,000 tpd. Currently, our plants are running at nearly full capacity utilisation,” Aditya Agarwal, director at Emami Group said.

In the last fiscal year, reported a revenue of Rs 12,000 crore led by the edible oils business. Retail sales of branded edible oils comprised around Rs 6,000 crore while non-branded sale of edible oils, mainly to institutions, comprised of around Rs 5,250 crore. Its earnings from the bio-diesel business stood at Rs 500 crore while speciality fats, supplied to various contributed Rs 250 crore to the consolidated turnover.

“This year, we expect a turnover of Rs 15,000 crore and in the next three years, it should increase to Rs 20,000-25,000 crore”, Agarwal said.

After Adani Wilmar, Emami is the country’s second largest edible oil company. The total edible oil market in India is estimated at around Rs 1.6 trillion of which only 30 per cent are packed edible oil.

Among the two brands Emami sells, Himani Best Choice accounts for Rs 4,500 crore or 75 per cent of the total sales and the rest comprise of Emami Healthy and Tasty edible oil.

At a time when nearly all FMCG are complaining about slowdown in consumption, Agarwal said, “We don’t see any slowdown in the foods segment atleast in edible oils. Demand from institutional sales has also been normal and hasn’t been hit”.

The company also recently forayed into the Rs 80,000 crore-strong spices category under the Emami Healthy and Tasty Mantra brand name and is targeting sales of Rs 1,200-1,500 crore in the next five years.

Agarwal said of the total spices category, only Rs 16,000 crore falls under the packed spices segment and the category is registering a 15 per cent growth rate.

Although currently has limited the availability to eastern India, the company will opt for a national roll-out of this business segment in 2020 and will be investing Rs 50-60 crore on this business.

First Published: Tue, August 20 2019. 17:57 IST