Edible oil producing companies such as Ruchi Soya and Godrej Agrovet are planning to expand their raw material sourcing base. The Rs 300 crore subsidy for developing oil palm plantations in the new Union budget has provided another impetus to producers in this regard.
The Ruchi group has 33,595 hectares of oil palm plantations at various locations. It has planned to expand this to 100,000 ha in the next five years. Godrej Agrovet, a Godrej Group company, has 33,000 ha under plantations and is looking for opportunities to expand this. The area under oil palm plantations in India is estimated at 13 million ha.
“We are looking at investing around $150 million (Rs 675 crore) in the palm plantation business globally, of which Rs 80-100 crore will be spent in India,” said Dinesh Sahara, managing director, Ruchi Soya ltd. The Ruchi group is looking at opportunities to take long-term land leases for palm cultivation at various locations globally. “We have identified Africa and Asia as thrust areas for this,” he said.
Ruchi already has 25,000 ha in Ethiopia and expects more land tobe allotted there in the near future. In Cambodia, it has asigned an agremment with the govenrment and looks forward to begin cultivation soon.
“Godrej Agrovet is also looking for developing and acquiring more plantations, if available at the right price,” said R R Govindan, vice president. The company has joined a consortium formed by the Solvent Extractors’ Association to grow soybeans in Uruguay.
Godrej Group’s international plantations operations are being managed by Godrej international. Its director, Dorab Mistry, said, “Godrej International, in partnership with local interests, has a land bank of about 11,000 hectares in East Kalimantan province of Indonesia. Planting is about to start on some of that land.”
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Godrej will only acquire degraded forest land and clear it in a sustainable manner and then proceed to plant oil palm. “We have no plans to buy mature plantations,” he said.
By industry estimates, going by the availability of sprouts with the industry, in the next one year, 40,000 ha can be covered under oil palm plantations with the additional support and subsidy announced in this year’s budget.
Government subsidy will include the cost of sprouts (plants developed in nurseries which are generally provided by these companies to farmers) and subsidy towards fertiliser and a few other farm expenses. The subsidy is needed for the first three-four years; after this, the tree starts bearing fruit for 25 years.