The Hindu Business Line : KRBL plans Rs 100-cr expansion

WITH the common minimum programme (CMP) announced by the Congress (I)-led UPA Government at the Centre laying a cardinal thrust on farm sector, the sentiment sweeping across companies engaged in various agri-related activities is upbeat.

Many companies are planning to pump in significant dollops of investment to extract maximum mileage out of the projected increase in market opportunities.

One company that has taken the lead in this regard is KRBL, India's leading rice exporter. The company has put up on its drawing board a proposal to expand and integrate its operations envisaging an outlay of Rs 100 crore, apart from spending another Rs 40 crore to renovate and expand its newly acquired milling plant in Punjab.

``The bumper crop this year, as well as emphasis by the Government on efforts to notch up double digit growth in the farm sector, the agri-based companies are all poised to see better fortunes in the coming times. India is now poised to become the foodgrain basket of the world, Mr Anoop Gupta, Joint Managing Director of the company, told Business Line.

He pointed out that according to the recent data released by CSO, the economy in Q3 has grown at a growth rate of 10.5 per cent helped mainly by the stellar performance of the agricultural sector, which grew by 16.9 per cent.

KRBL Ltd's exports of account for nearly 11 per cent of the total Basmati exports from India. In its efforts to capture the benefits of entire industry value chain, KRBL had recently acquired an integrated rice milling plant in Dhuri, Punjab. The plant has the capacity of processing 120 tonnes per hour, which is one of the biggest capacities in the world.

"We now propose to invest close to Rs 40 crore in the plant for renovation and up-gradation. This is apart from the Rs 100 crore we are planning to invest for the expansion and integration of its operations. We are targeting a turnover of Rs 1,000 crore in the current year," according to Mr Gupta.

The husk from this plant will be used for the production of furfural and for generation of 11 Mega Watt power through backpressure steam turbines. Based on the capacities, KRBL would be producing approx 3,000 MT of furfural, which shall contribute Rs 7 crore in FY05 and Rs 8.50 crore in FY06.

Through its own power generation facility the company expects to save Rs 11 crore annually.

On the research front, the company has recently mastered the technology of converting the by-products of rice into profitable revenue streams. After a decade of R&D, KRBL has identified that the by-products (husk, bran) have the potential to generate multiple sources of revenue.

Husk, the outer shell of the paddy, has wide variety of applications - for example it can be used to extract furfural, generate power and produce pharmaceutical grade silica. Bran, which is another by-product, can be used to extract edible rice bran oil and make de-oiled cakes for animal feed. All these compounds command a premium price in the market, some as high as $40 per gram or $40,000 per kg.