The Hindu Business Line : Jayant Oils to increase contract farming area in Vidharba

Mumbai, March 24 Jayant Oils and Derivatives Ltd (JODL) plans to increase by four times the area under contract farming in Vidharba region. The company is in the process of signing agreements with farmers to grow castor as a supplementary crop in one lakh acre.

Last year, JODL covered 25,000 acres and garnered 10,000 tonnes of castorseed in Vidharba.

“With active coordination of government agencies and NGOs, the response has been tremendous. We advise the farmers to grow castor as inter-crop with their main course The company provides free seeds and helps them with processing, packing and procuring from the farm gate. The farmers get a minimum assured price of Rs 17 per kg,” said Mr Sunil S Bhandare, Chief Economist, JODL.

The company is considering to set up castor crushing unit in Vidharba once it is able to sign up for 2.5 lakh acres. “We intend to have a unit once we are able to procure 2 lakh tonnes of seeds per season,” said Mr Rajesh M Kapadia, Managing Director, JODL.

The company has a 2.20 lakh tonnes per annum crushing unit in Gujarat and requires about 750 tonnes of castor seeds per day. Gujarat supplies about 75 per cent of the company’s requirement, while less than 2 per cent comes from Vidharba.

The hot and humid conditions in most of Vidharba districts are similar to major castor growing areas such as Mehsana, Banaskantha, Saurashtra and Kutch of Gujarat.

“Soyabean is sown in June and arrivals end in November, while castor can be sown by end of July and can reach markets in December to January. The process will spread the farmer’s income. However, this time due to delay in sowing, the arrivals are expected to end April first week,” said Mr Bhandare.

The contract farming in Vidharba is likely to bring down operation cost for the company by Rs 5.50 per kg and result in a saving of Rs 2 per kg. “Profit margin may rise 1.5 per cent,” he said.

SEZ in Gujarat

JODL’s demand for castor seed is likely to double once its proposed special economic zone at Vilayat in Barauch district of Gujarat comes up. It is in the process of acquiring 360 acres from Gujarat Industrial Development Corporation.

“We intend to invest Rs 600 crore in next three years in the SEZ and produce high value castor derivatives such as nylon 11,12 used in automobile and telecom and nylon 6,10 used in toothbrush, zip fasteners and fishing nets,” said Mr Kapadia.

The company exports 85 per cent of its production to 50 countries. “We want to concentrate on castor derivatives rather than exporting oil,” he said.

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