The Hindu Business Line : Sanwaria Agro Oils to expand capacity

SANWARIA Agro Oils Ltd (SAOL) is planning to increase production capacity to 4.5 lakh tonnes annually from the current 1.27 lakh tonnes, through acquisition and leasing of existing solvent extraction and refining plants in Madhya Pradesh.

At present, the company is the second largest manufacturer of soya oil and de-oiled soya cake in the country, after Ruchi Soya Ltd.

"The company is expanding its production capacity from 800 tonnes per day to 1,800 tonnes per day (tpd) in the next few months, by acquisition and leasing of some sick plants in Madhya Pradesh. The proposal has been given to IDBI and IFCI to acquire 2-3 sick units in that region," Mr Anil Agrawal, Director of the SAOL, told Business Line.

"The company has recently leased out one solvent extraction plant of 400 tpd in the Itarsi-Bhapal belt," Mr Agrawal said.

"Export demand for soyameal or deoiled cake (DOC) is good this year due to re-appearance of the Mad Cow Disease, globally. There is a big shift from animal-based cattle feed to vegetable feed. Soyameal, being rich in protein, is finding great demand in the US and the European markets," he said.

"The company have been receiving good export orders from neighbouring and Far East countries. The company has exported about 4,000 soya meals worth Rs 4 crore to Pakistan. More business is expected," he said.

According to him, on the retail front, SAOL's performance has been encouraging. Both its brand, Sulabh and Narmada have found good response in the MP, Chattisgarh and Orissa markets.

The company had recently launched its soya refined/ cooking oil in 1 litre PET bottle. It had earlier launched 1 litre pouch, and 2 litre and 5 litre consumer packs in the domestic market. The move is part of the company's efforts to strengthen its market position by focusing on brand-building and forward integration.

The company posted net sales of Rs 1,079.97 crore for the third quarter of the current FY (2003-04), recording a top line growth of 168.35 per cent, as compared with Rs 402.45 crore in the same period of the previous year. Revenues for nine months ended December 31, 2003, stand at Rs 2,030.73 crore; grew by 62.82 per cent over the corresponding nine-month period in the previous year. Profits after tax for Q3, stands at Rs 48.66 crore, registered an increase of 142.74 per cent over profit after tax of Rs 20.04 crore posted during Q3 last year.

Profit after tax for the nine-month period, at Rs 99.49 crore, grew by 8.98 per cent over profit after tax of Rs 91.29 crore the previous year. The earnings per share for Q3 works out to Rs 3.45, as against Rs 1.51.

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