Sanwaria Agro to add 1,200 tonne refining capacity

The Rs 200 crore Sanwaria Agro Oils Limited (SAOL) is planning to increase its daily extraction capacity by 1200 tonne through acquisitions in Rajasthan and Madhya Pradesh, over the next one year.

The company has also decided to enter into trading and retailing of mustard oil with a capacity addition of 800 tonne per day in its existing extraction plant at Itarsi.

Alongside, SAOL is exploring export opportunities in de-oiled cake (DOC) products in new countries, following success in exports of soyameal and DOC during the last fiscal due to recurrence of mad cow disease.

Anil Agrawal, director SAOL said, "To cater to the increasing demand for our products in edible oil and also DOC in the international and domestic markets, SAOL is planning to increase production capacity through acquisition and also leasing of existing solvent extraction and refining plants."

Agrawal added that two months back, the company mooted a proposal with the Madhya Pradesh state government and also Rajasthan state government for taking over two plants and one plant respectively in these states from the state-run enterprises to add around 1200 tonne of daily production.

The company is expecting the acquisitions to materialise by the end of the current fiscal.

At present, SAOL has a capacity of extracting 400 tonne a day at its Itarsi plant, while at the leased plant at Banapura, Madhya Pradesh, the capacity is 400 tonne a day.

SAOL, which reported a sales turnover of Rs 203 crore by end of the first nine months of the last fiscal year with a profit after tax (PAT) of Rs 91 crore, expects to hike its sales turnover to over Rs 400 crore by end of the current fiscal year. The company's current order book for export of soyameal is pegged at $ 2.5-4 million.

"Due to re-appearance of the mad cow disease, globally there is a big shift from animal-based cattle feed to vegetable feed and soyameal, being rich in protein, is finding great demand in US and European markets. We have recently concluded orders worth $ 3.5-5 million and we are currently pursuing additional export orders," said Agrawal.

SAOL will also strengthen its presence in the retail segment.

The company, launched its 'Sulabh' and 'Narmada' branded soya oil in some markets a year back on an experimental basis. It launched packaged soya oil in Madhya Pradesh, Chhattisgarh, Rajasthan, Delhi and also in some areas of Gujarat and Uttar Pradesh.

Now the company plans to take both the brands in Maharashtra, Western UP, Orissa and with launch of mustard oil, expected during this June, it is planning to make entry into the entire eastern region with emphasis in West Bengal and north-eastern states.

"In the retail market for next few years, our focus will be mainly on the rural and semi-rural market while it will be later extended to the urban markets as we will require time to create a strong distribution network" said Agrawal.

During the last fiscal year, retail business accounted for around 15 percent of the company's total revenues, which will increase to 25 per cent during this year.