KRBL lines up rice bran byproducts push

KRBL Ltd, India's largest exporter of basmati rice, aims to become the first rice company in the world to launch a crude rice bran oil with a free fatty acid (FFA) content of 3.

It is also looking at other by-products such as power bar chocolates from natural rice bran which currently comprises part of the diet of American soldiers. It will sell bran powder as a substitute of milk, for babies.

"In a country like India where there are more than 42,000 rice mills, we are now looking at consolidating our by-product division and in future, we are expecting that our by-products division will be profitable than our whole rice division combined," said Anil K Mittal, chairman and managing director, KRBL Limited.

The by-product division will be developed in the newly purchased and refurbished plant at Dhuri in Punjab.

"Our plant has a rice milling capacity of 120 MT/hour taking the company's milling capacity to 170 MT/hour, rice bran oil refinery capacity of 200 MT/hour, furfural capacity of 10 MT/hour and power generation from husk with a 10.5MW turbine capacity at Re 1 per unit whereas the cost of power generation in Punjab is Rs 4 per unit," stated Anoop K Gupta, junior managing director, KRBL Ltd.

Husk will also be used to produce pharmaceutical grade silica while burnt ash from husk will be utilised to make moulds for the foundry and bran for de-oiled cakes to be used as cattlefeed and a railway track would also be constructed coupled with a one million square feet warehouse.

This plant was acquired when KRBL Ltd. took over the assets of litigation plagued Oswal Agro Forane Limited and spend around Rs 100 crore including upgradation and refurbishment cost, whereas Mittal informed that setting up such a by-product integrated plant usually requires Rs 300 - Rs 350 crore.

The Dhuri plant will be operational from September 2005 and we expect it to contribute Rs 250 crore to our expected turnover of Rs 750 crore for the next fiscal, explained Mittal.

KRBL Ltd. accounts for 11 per cent of India's Basmati rice export and has a 52 per cent share in the American Basmati market and total exports to United States of America amount to 16,800 tonne.

The company's products retail at Costco, Kroger, Kmart, Walmart and Sam's Club.

With the possibility of Walmart entering the Indian market, KRBL Ltd. is in talks with the retail major and believes that the entry could be a strong impetus to gradually increase branded Basmati sales.

The international growth rate for this particular segment has been 6 per cent and for national packaged rice it has been 10-12 per cent.

According to Mittal since 1999 consumer pack segment has witnessed a growth of 300 per cent each year.

Last year KRBL sold 50,000 tonne of India Gate Basmati, the company's flagship brand out of which 16,000 tonne comprised the 1 and 5 kilos consumer packs - 200 per cent jump from 2003-2004, remarked Mittal.

Exports contributed 60 per cent to the company's turnover, the rest being domestic.

West Bengal contributes around 4.5 - 5 per cent of the total domestic market turnover.

A major impediment to our European exports was the duty differential, but due to reduction in duty since last year, we plan to start our operations with an office in London within the next six months, Mittal noted.

KRBL Ltd. has a corpus of $2.5 million for research and development, 22 cents per tonne for Basmati and 10 cents per tonne allocated for non Basmati brands.

The company has 200,000 acre of India's largest Basmati contract farming programme and distributes 1500 tonne of seed through its seed distribution arm.

KRBL Ltd. launched India Gate classic Basmati, the ultra long grained Basmati in the city with a cooked length of 23 mm, priced at Rs 74 for 1 kg and Rs 365 for 5kg pack.