8/20/2004,TINDIA (THE ECONOMIC TIMES) - With edible oil importerspreferring to set up refineries near ports, West Bengal with its two portsat Kolkata and Haldia, has turned out to be another favourite spot forsetting up greenfield refineries, after Gujarat, Maharashtra, AndhraPradesh and Orissa.

Although the state is yet to have mega refineries with capacity rangingbetween 1,000-1,500 tonnes per day (tpd), it nonetheless has threemid-sized 600 tpd refineries and is going to have two more refineries inthe mid-size category - one with a capacity of 600 tpd and another with500 tpd.

This will be in addition to scores of small refineries, which are alreadyin operation, with capacity not exceeding 100 tpd. With the commissioningof the two new plants, the state's total refining capacity will increasenearly 40% to 4,000 tpd by the middle of next year.

The 600-tpd edible oil refinery is coming up at Budge Budge, near Kolkataport, which is being promoted by the Rs 200-crore local miller, KanchanOil (KOL). The company is however not implementing the new projectdirectly, but through its newly acquired company, Budge Budge Refinery.

To turn this once sick unit into a modern edible oil refinery-cum-toiletsoap manufacturing complex, KOL plans to invest about Rs 65 crore.

"We will basically refine crude palm oil after importing it throughKolkata port. As the plant is situated in a strategic location at BudgeBudge, which is near to the port and the city, we can save at least Rs 200per tonne on transportation cost compared to those plants situated atHaldia.

The overall cost of refining will come down further with full utilisationof the by-product by our soap factory, which is a forward integration ofthe edible oil refinery," Vijay Agarwal, executive director, KOL, told ET.

The other Rs 40-crore plant with a 500 tpd capacity is coming up atHaldia, which is going to be implemented by Ambo Agro Products, a 50:50joint venture between Ambo Exports and a Singapore-based cooking oilrefinery.

Without divulging the name of the foreign company at this juncture, OPAgarwal, chairman of the Ambo Group of companies, said "our foreignpartner owns a giant sized refinery in China and has a substantial stakein palm plantation in Indonesia and Malaysia."

The Rs 60-crore Ambo Exports, which is an associate company of anothermid-sized local player, Swastik Refinery, is one of the largest teaexporters in the country.

Haldia nowadays has emerged as the favourite spot to edible oil companiesfor setting up refineries after importing primarily crude palm oil fromIndonesia and Malaysia and crude sunflower and soya oils from the US andsouth America.

Three 600 tpd refineries have already sprang up here, which are being runby MP Glychem Industries, Ruchi Soya Industries and Acalmar Oils and Fats.