Reliance plans foray into medicinal plants

In talks with Nabard for loans to farmers & funding processing units at Jamnagar, Navsari

Reliance Industries Ltd is planning to set up processing centres at Jamnagar and Navsari in Gujarat for medicinal plants that the company plans to grow over close to 1,000 hectares of land on a contract farming basis.

Reliance has held the initial round of talks with the National Bank for Agriculture and Rural Development (Nabard) for funding both the processing centres as well as providing loans to farmers.

Nabard officials on Thursday said Reliance was in talks with the bank for the venture over the past three months and Reliance is yet to provide the detailed plan.

"What we do know is that the two processing plants will be located at Jamnagar and Navsari. The main plant will be at Jamnagar and the satellite plant at Navsari," said Bhawar Puri, chief general manager, Nabard, Gujarat region.

It appears that the company is planning to cash in on the global demand for herbal products by launching its own range of such products.

Puri said according to the talks that have taken place so far, Nabard will be involved in financing both the proposed processing plants as well as providing loans to farmers to grow the plants.

"We are given to understand that Reliance will first grow Aloe vera and bacholi plants, and subsequently branch out into other medicinal plants as well," Puri said.

According to details provided by Nabard officials, the per-hectare cost for the project works up to around Rs 1.50 lakh.

Of this, about five per cent of the cost will be borne by the farmers, while the remaining will be financed.

"The project, which is spread over a period of five years, is worth around Rs 1,000 crore as the plantation will take place over an area between 800 and 1,000 acres," Puri said.

Asked if the company has formed a separate entity for the medicinal plant foray, Puri said, "I would rather not comment on that. These are corporate announcements to be made by the company itself." Puri, however, said the talks with Nabard were still in the initial stage and Reliance is in the process of fine tuning the project.

He, however, said the company will adopt contract farming where it will assure buy back of the medicinal plants from farmers.

Nabard will finance the farmers as well as creation of the processing houses, Puri said.