10/06/2008 (Business Standard) - Malaysian edible oil major MM Vitaoils is scouting for a local partner here to enter Rs 20,000 crore palm oil market in India, where it plans to invest $50 million and to acquire a refinery.

"We are planning to duplicate our successful downstream activities in palm oil industries in India. Rough estimation would involve $50 million," Vitaoils' General Manager Dina Talib said in an email interview.     

She said, the company is interested to buy edible oil refinery in India as well as joint venture (JV) with a local partner for its India plan.     

Vitaoils, which has 24 edible oils products exporting to 61 countries in its 8-year operation, is moving upstream in the palm oil industry by acquiring both plantation and mills.     

"Having our own crude palm oil (CPO) will result in us building our refinery as well (in India)," Dina said adding the company also looks forward to any proposal of joint venture in refinery in India.     

India's Adani group, which sells the 'Fortune' brand of oils, has a JV with leading Malaysian trading firm Wilmar. Other foreign companies dealing in edible oils include Bunge, Cargill and Archer Daniels Midland (ADM).     

Industry experts said new players should not set up refineries as India has already over capacity and many units are not utilising their full capacity.     

"It is not a profitable proposition to set up new units as domestic players are facing a tough time in utilising their capacity," Mumbai-based Solvent Extractors Association (SEA) Executive Director B V Mehta said.     

Kandla alone has 7-8 units of 8,000 tonnes per day capacity, he added.

All the foreign majors have either set up refineries or bought existing ones in places near ports like Mundhra, Kandla, Kakinada and Paradeep.