26/02/2008 (DNA India), Mumbai - Godrej Industries, in an effort to push its oil palm plantation business, has formed a joint venture with a Malaysian planter, IJM Plantations.

One of the largest plantation firms in the world, IJM had signed a memorandum of understanding for the same with Godrej Agrovet Ltd (GAVL) a year ago.

Adi Godrej, chairman, Godrej Group, told DNA Money: “This will help us leverage IJM’s technical know-how on oil palm plantation. Also, Malaysia does not allow exporting planting material unless it is through a joint venture. So we can now import high-quality planting material from IJM for our plantations.”

IJM, a listed company in Malaysia, has a 51% stake in the new company and Godrej owns the remaining 49%. This joint venture is only for plantation areas in Karnataka and Goa and will involve procurement of palm-oil planting materials, raising nurseries, supply of seedlings and provision of agronomic assistance to farmers in the country.

“We have formed a joint venture with IJM for areas of northern Karnataka and Goa,” Nadir B Godrej said in an interview to Reuters. “The joint venture will provide planting material to farmers to develop palm plantations and buy fruit bunches from them. We also plan to set up mills.”

GAVL, which is also in the business of animal feeds, agricultural inputs, poultry, retailing of fresh farm produce in urban areas and rural retailing of a wide range of products, has received land from the government for contract farming to promote oil palm plantations.

It has plantations in other states such as Orissa, Andhra Pradesh and has recently entered parts of Gujarat and Mizoram, too.  “The business is already profitable. The entire production is for India, to meet the shortage of palm oil. We ourselves don’t use any of it since we import oil derivatives for our own products,” said Godrej.