21/02/2010 (Financial Chronicle) - The Rs 2,500-crore diversified Emami Group, which is foraying into the edible oil space, will invest around Rs 500 crore in setting up two edible oil refineries in Kris­hnapatnam (Andhra Prade­sh) and Pipavav (Gujarat) as it expects the units to go on stream by 2010-2011, a top official said on Saturday.

“We will invest Rs 250 crore for setting up the Krishnapatnam plant. We expect the land to be handed over very soon and the plant will be ready within the next 9-12 months after land is given. The Krishnapatnam unit will be able to do 1,000 tonnes per day of palm and 300-500 tonnes per day on sunflower oil. A similar am­ount will be spent for the Pipavav unit for which details are being worked out. As per preliminary estimates, the Pipavav unit will do similar amounts of palm oil but instead of sunflower, it will do groundnut oil,” said Aditya V Agarwal, director, Emami.

For the time being, it will rely on edible oil supply from its Haldia plant as well as ou­tsourcing from Andhra Pra­desh (for sunflower oil) and Rajasthan (for mustard oil). At present, the Haldia unit can do 1,000 tonnes of palm oil per day and 600 tonnes of soyabean oil.

While Emami edible oil, which is being branded as ‘healthy and tasty’, will be initially introduced in West Bengal, North-East and Karnataka - plans are afoot to launch the product on pan-India basis by June-end. Emami is launching six variants — soyabean, palmolein, mustard (kachi ghani), sunflower, soyabean blend and palmolein blend.

“We are looking at opportunities to acquire acquisitions, both domestic as well as overseas, in the edible oil space,” said Aditya Agarwal. In its other lines of business such as personal care and beauty products, the Emami Group has done small to medium-sized acquisitions and as it enters the edible oil business, inorganic acquisitions will possibly determine how fast it can be the top two players in the this market.

According to the firm, the Rs 10,000-crore branded edible oil market has immense potential with per capita edible oil consumption low and branded oil sales constituting just 12-15 per cent of the total edible oil market.

The edible oil foray by the group is being charted out by Emami Biotech, which is targeting to clock Rs 3,500 crore edible oil sales within the next 3 years, said Manish Goenka, director, Ema­mi. Emami is aiming to garner Rs 300 crore of business in the very first year of launch, he added.

With the firm earmarki­ng Rs 100 crore for advertisement and promotions for the next 3 years, a television commercial featuring M S Dhoni and Preity Zinta - the brand ambassadors of Hea­lth and Tasty Oil - will hit the air in the next fortnight.