Kutch emerges India's edible oil hub

Edible oil companies across the country are setting up their units in Kutch to avail of the tax holiday announced by the Central government. Centre had announced the tax holiday after the region was hit by a devastating earthquake in January 2001.

The government has exempted edible oil refining units from paying excise duty of Rs 1,000 a tonne.

So far six edible oil majors "" Parakh Foods, Gokul Refinery, Ruchi Industries, Cargil India, Param Industries and Adani Wilmer "" has set up or are in the final stages of setting up their units in the region. Still half-a-dozen edible oil companies are eyeing at the extension of tax holiday by another two years to start their operations.

"Edible oil companies are flocking Kutch to set up their units because of the tax incentives announced by the Central government after the devastating earthquake of January 2001. Since these companies import palm oil and crude palm oil from the East Asian countries, proximity to Kandla and Mundra ports is also is an added advantage," said, Mahesh S Tirthani, secretary, Gandhidham Chamber of Commerce and Industry.

According to industry estimates, Kutch is expected to have an annual edible oil refining capacity to the tune of 23.75 lakh tonne by the end of the current financial year, which would account to 37 per cent of the entire country's consumption. At Rs 50,000 per tonne, this would translate into an annual turnover of Rs 11,875 crore for the district.

By the end of 2004, it is expected that as many as six new big refineries would start its commercial production in Kutch and this will add an additional refining capacity of 6,200 tonne per day.

Some of the big players setup up new refining facilities include Cargill India with its Nature Fresh brand, Parakh Foods with Gemini brand, Ruchi Industries with Ruchi brand and Param Industries with Mahakosh, each one setting up refineries with the capacity of 1,000 tonne per day, while Gokul RefOil with Gokul brand is setting up a refinery with capacity of 800 tonne per day.

Adani Wilmar Ltd, has signed a memorandum of understanding (MoU) during the Vibrant Gujarat Global Investors Summit -2003, to set up an edible oil refining at Mundra Special Economic Zone (SEZ) with investment of over Rs 150 crore.

Proximity to Kandla and Mundra ports, which accounts for about 40 per cent per of India's edible oil imports, is another important reason from the oil majors shifting their bases to Kutch.

The Indian arm of the US agri-business giant Cargill India has also signed a memorandum of understanding with Parakh Foods Ltd to set up unit for edible oil in Kutch since both companies have business interests in region. Once finalised, the joint venture will be the largest in the country with a daily refining capacity of 5,000 tonne.

With the oil majors setting up units in Kutch, the import of refined oil from November 2003 to July 2004 has shown a sharp rise.

The import of crude oil from November 2003 to July 2004 stood at 2,207,656 tonne against 3,753,825 tonne during the same period of last year.