Malaysian firm, Godrej ink palm oil joint venture

Godrej Agrovet (GAVL), a subsidiary of the Rs 6000 crore- Godrej Group, has signed an MoU with IJM Plantations Berhad, Malaysia for the expansion of palm oil business in India. The joint venture is expected to give a boost to palm oil production in India.

The plantation business of GAVL would be managed by the new joint venture company to be formed, with equity participation from both the companies, Adi Godrej, chairman, Godrej Group, said.

IJM would supply seedlings to domestic farmers which are expected to give better yield.

"This venture by Godrej and IJM is just a beginning of cross ventures and many more would follow. Investors from both the countries are keen to set up business units in the form of joint ventures, independent plants and equity partnership," said Datuk Peter Chin Fah Kui, Minister of Plantation Industries and Commodities, Malaysia, said.

''We have not made any decision on the financial aspects nor any equity limitations has been drawn by us'', Adi Godrej said, but added it would be worked out very soon.

The MoU signed between the two companies provides the framework and establishes the areas of collaboration that include procuring oil palm planting materials, raising nurseries, supply of seedlings, processing of oil-palm crop and provision of agronomic assistance to oil palm farmers.

GAVL, the largest oil palm processor in India, grows oil palm in about 10000 hectares of land in Andhra Pradesh, Goa and Karnataka. Oil mills have been set up in Andhra Pradesh and Goa.

Oil palm plantation development activities have also been taken up in Gujarat, Orissa and Mizoram. GAVL has also taken initiatives to promote cultivation of oil palm among farmers. It has also set up one stop shops for supplying farmers with seeds, fertilizers, pesticides and for providing technical guidance.

CK Vaidya, managing director, Godrej Agrovet, said, "Signing of this MoU is the first step towards a promising venture that would boost our palm oil business in the country. We are certain that this JV will bring together the vast experience of Godrej Agrovet and the technical know-how of IJM Plantations to move up the palm oil business value chain."

"The strength and experience of Godrej Agrovet combined with our knowledge and expertise in this business will help us to rapidly expand palm oil business in India. As both the groups share excellent track record, I am confident that we will together be able to bring in the best to the growing palm oil business in India" said Velayuthan Tan, CEO and MD, IJM Plantations Berhad.