Mumbai, Mar 26 (UNI) Edible oil manufacturer K S Oils today said it has acquired 20,000 hectare of palm plantation in Indonesia and will invest Rs 230 crore for ensuring raw material supply.
With this investment spread over the next three years, the Company would ensure backward integration to secure raw material supplies and avoid global price volatility, KS oils release stated issued here today.
This would also help the Company in reducing raw material costs significantly and also signals the Company's strategic intent of being a global player, the Company asserted.
Commenting on the acquisition, Company Chairman Ramesh Chand Garg said, ''Indonesian palm plantations are among the most efficient and productive plantations across the world and hence our decision to invest owing minimising the risk, at a time when commodity market is volatile.
With current investments in the project pegged at Rs 230 crores over a three year period, the plantation will yield 80,000 Mt annually. This will substantially bring down the raw material costs for the Company, which is currently importing palm oil to refine and sell along with its main product of mustard oil in Northern and Eastern India, Mr Garg said.
The investment has been routed through the Company's wholly owned subsidiary in Singapore. Interestingly, the plantation yield of 80,000 Mt represents 2.5 per cent of India's current palm oil imports, which today stands at 3.6 million tonnes annually, he added.
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