With a view to emerge as a leading manufacturer and garner substantial marketshare in the branded edible oil segment, the Emami Group has earmarked Rs 950 crore over the next two years for the purpose, even as it is looking at a national roll-out of its Healthy & Tasty oil brand.
The investments will be done through the Group's wholly-owned subsidiary, Emami Biotech, the official said.
"We are looking at investing around Rs 950 crore in Emami Biotech, the arm that looks after our edible oil business. The funds will be raised through a combination of internal accruals, equity and debt. Thirty per cent will be raised from equity," Emami's Director, Aditya Vardhan Agarwal, told PTI here.
The funds will be used to expand existing units as well as set up green-field projects, Agarwal said.
Set up in 2006 to manufacture bio-diesel from Jatropha, Emami Biotech, is, however, currently focusing on edible oils as it is facing some regulatory issues in bio-fuel.
The company currently produces 1,600 tonnes per day (tpd) of edible oils such as palm, soya, mustard, blended and sunflower. It plans to expand its capacity to 3,000 tpd over the next two years, Agarwal said.
On expansion, Agarwal said the company already has a 300 tpd of palm oil in Haldia, which it wants to expand up to 1,000 tpd by August 2011.
It also plans to add another 600 tpd for soya oil at Haldia. Besides, it is setting up a new unit of 1,000 tpd palm oil and 200 tpd sunflower oil at Krishnapatnam in Andhra Pradesh and another 1,000 tpd palm oil unit in Gujarat.
All the units would start operation by end-2011, he said.
"We have already signed an MoU with the Gujarat Government for setting 1,000 tpd of palm oil. We are investing close to Rs 250 crore in Gujarat alone," he said.
The company was also looking at acquiring a 200 tpd mustard oil unit in Rajasthan, he said, without divulging further details.
The company's strategy would be to focus on manufacturing and marketing its own brand.
"We are eyeing a Rs 5,000 crore business from oil in the next three years, up from the present Rs 1,000 crore," he said.
On its branded edible oil business, Agarwal said, "We have launched Healthy & Tasty in a few markets in West Bengal, Orissa, Bihar, Karnataka and Tamil Nadu. The response has been encouraging and we are expect to garner a healthy marketshare in the value-for-money edible oil segment."
The company is planning a national roll-out in the next 6-12 months post-which the brand will be available in all modern retail as 'kirana' shops.
It has lined-up strong promotional and marketing strategies, one of them being the very attractive price points of Rs 5 and Rs 10 pouches.
