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G.K. Nair

Kochi , Feb. 14

AVT Natural Products Ltd (AVT NPL) plans to set up a marigold plantation and processing unit in China in strategic alliance with a US based company.

"Final discussions are going on and the company is hoping to conclude the negotiations in three to four months," Mr M.S.A. Kumar, Managing Director, AVT NPL, told Business Line.

Surveying the potential areas is under way besides "we are discussing on the province for growing marigold and setting up the post-harvest processing unit," he said.

"The project could be a 100 per cent AVT NPL company. However, we may also consider a joint venture," Mr Kumar said. When asked about choosing China, he said: "Low cost of production, government incentives and support there were encouraging."

Besides, the weather was quite conducive, he said. Once the project is finalised, AVT will be the first company to set up such a project outside India, he said.

Details of the project, such as the extent of investment, capacity, area under cultivation etc, would be known after finalisation, Mr Kumar said. It would introduce contract farming there, adapting to the local conditions, he said.

The company is at present the major exporter of marigold oleoresins making up 70 per cent of the Indian exports, while its share in the global market of around Rs 300 crore amounting to 20 per cent. The global demand for it was growing at 10 per cent a year, he said.

The company produces marigold through contract farming in 35,000 acres spread over Maharashtra, Madhya Pradesh, Andhra Pradesh, Karnataka and Tamil Nadu and exports marigold oleoresins to the US has already entered into a strategic alliance with the US company, Kemin Industries Inc.

Kemin Industries, nutritional ingredient manufacturer, is a premier manufacturer and marketer of lutein (a growing nutritional ingredient used in animal and human health products). Under the five-year strategic alliance, it would buy the entire product from the proposed AVT unit in China. In fact, India and AVT NPL will be the key strategic supplier of marigolds for Kemin.

According to Kemin sources, it will leverage Kemin Industries' expertise in the research and development of nutraceutical products and AVT's core competencies in agri-business, including managed logistics of flower growing and collection, good manufacturing practices and food safety based extraction.

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