Jayant Oils eyes acquisition in US

Company is concentrating on R&D, distribution and contract farming.

Jayant Oils and Derivatives Ltd, a Mumbai-based company with an annual turnover of Rs 688 crore, plans to acquire a company in the US or Europe to establish its distribution network abroad.

The company is also concentrating on its research and development operations to expand its castor oil derivatives production. The company is also focussing on becoming more self-reliant in raw materials by contract farming.

Rajesh Kapadia, Managing Director, Jayant Oils and Derivatives Ltd., told Business Standard, "The company plans to acquire an existing company in US or in some European country to enhance its distribution in global market. We may also set up one of our own distribution companies under the name of Jayant Oils and Derivatives Ltd. abroad. We will take the decision whether to go in for acquisition or to set up our own company later. This will be part of enhancing the company's distribution network globally."

However, he did not reveal the names of the companies they are in talks with.

On the company's future plans Kapadia said that the focus of the company is more on the derivatives business at the moment and to grow the derivatives business they are concentrating more on the company's R&D operations.

"We have decided to concentrate more on the derivatives business of the company. Our Sebacic acid plant in Padra will start functioning in March 2007. Setting up of the plant was also a part of the company's extended focus on derivatives business. We will decrease our supply of castor oil in the market and instead start consuming it more to boost our derivatives business as we feel that the company has the necessary resources for derivatives business and the future of the castor oil derivatives is also bright."

The company aims to be more self reliant where the castor seeds are concerned. And for that the company is concentrating on contract farming.

"We are trying to be self reliant in raw material for that we are also focusing on the contract farming in Vidarbha where we have contract farming operations going on since more than a year."

On Monday the company officially announced its plans of setting up a Sebacic acid plant in Ekalbara of Padra taluka in Vadodara district. The company had bought an existing plant from Chinese company Shandong Ocean Chemical Import and Export Ltd. for Rs. 75 crore.

The plant, spread over 27 acres of land, will manufacture 8,000 Metric Tonne of Sebacic acid per annum. The company is also planning to increase this capacity to 11,000 MTPA within one year. "For that we will simply upgrade the existing facility in Ekalbara," Kapadia said.

According to the sources the company has recently acquired lands in Ranoli and Itola in Vadodara. The Ranoli piece is spread over 10 acres while the land in Itola is 30 acres.

The sources, however, declined to reveal the details of the plans. They also added that the company is planning to come out with an IPO soon.