Godrej ropes in Malaysian firm for palm oil technology

Godrej Industries, part of business conglomerate Godrej Group, has set up a joint venture with Malaysian firm IJM Plantations to develop palm estates and palm oil mills in India.

The joint venture will be operated as a new company under GIL's subsidiary, Godrej Agrovet (GAVL). IJM will have a majority stake of 51 per cent in the venture and Godrej 49 per cent. Financial details of the deal have not been disclosed yet.

On the main objective for setting up the venture, Chairman Adi Godrej said, "For our existing oil palm business in Karnataka and Goa, we need better technology and planting material, which could be acquired mainly from Malaysia. IJM will provide the technology for our existing oil palm plantations there under the JV."

Malaysian trade norms prohibit export of plantation technology or materials unless done through a Malaysian firm.

This has led Godrej to join hands with IJM, which is one of Malaysia's largest construction groups with presence in property development, quarrying, manufacturing and plantation.

Godrej, a market leader in manufacturing of oleochemicals in India, expects the venture to boost its oil palm businesses as well.

Other businesses under GAVL include animal feeds, agri inputs, poultry, retailing through Nature's Basket stores in urban areas and rural retailing stores Aadhar. GAVL grew 24 per cent in the third quarter this financial year.

Another Indian oleochemicals and soap manufacturer, VVF Industries, has also turned to Indonesia, one of the biggest palm oil exporters to India, to set up a greenfield facility there at an investment of Rs 400 crore.

The facility in Indonesia will help the company save costs as of crude palm oil prices, a key raw material for manufacturing soaps, are rising rapidly in the country.