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KS Oils board okays edible oil plant acquisition

Another edible oil plant tie-up in alwar also okayed


Expansion :
Crushing per day will be increased from 225 tonnes to 440 tonnes. Refining capacity will be raised to 150 tonnes from 50 tonnes at Jodhpur plant in the next 4-5 months.

The board of K.S. Oils Ltd (KSOL), Morena (Madhya Pradesh), has approved the acquisition of edible oil plant at Jodhpur (Rajasthan) and also approved the tie-up arrangements for another edible oil plant in Alwar (Rajasthan) at its meeting held on June 7.

The plant at Jodhpur has current crushing capacity of 225 tonnes per day and refining capacity of 50 tonnes per day. "The company will pump fresh fund of Rs 25 crore for acquisition and capacity expansion at Jodhpur plant. The company has also a tie-up arrangement with the Alwar-based plant," Mr Ramesh Garg, Chairman, KSOL, told Business Line.

Under the one-and-half-year contract with the Alwar-based unit, the company will pay processing fees for using its spare capacities.

Capacity Hike:
"The company will increase from 225 tonnes to 440 tonnes crushing per day and 50 tonnes to 150 tonnes refining per day at Jodhpur plant in the next 4-5 months," Mr Garg said. KSOL is the largest mustard seed crushing company in the country. The company's crushing capacity is 1,000 tonnes mustard seeds per day at Morena, Madhya Pradesh.

"We have decided to increase our presence in Rajasthan by creating fresh crushing and refining capacities of mustard seeds and oil," Mr Garg said.

Rajasthan is a major producer of mustard seeds in the country. Currently, KSOL is operating at 40-45 per cent capacity utilisation. It plans to increase the same to 60 per cent to meet the demand from its retail customers.

Retail Plans:
"We are actively in talks with leading retail chains, hypermarkets and MNC companies for supply of its products to the end consumer and also strengthening its retail basket by selling in smaller sachets and pouches which are more affordable," Mr Sanjay Agarwal, CEO, KSOL said. The company markets its mustard oil under brands `Double Sher' and `Kalash'. These two brands enjoy the leadership positions in northern, central and eastern parts of the country. Double Sher has 70 per cent market share in the North-East.

More Outlets:
Currently, the company has five depots and plans to open 14-15 new depots over the next two years to develop its retail presence. Some of these would be opened in Chhattisgarh, Guwahati, Gwalior, Bilaspur and Raipur.

Total revenue for the FY 2005-06 touched a record time high of Rs 604.27 crore registering a healthy growth of 34 per cent over Rs 455.11 crore in FY 2004-05. The company's profit after tax grew by a whopping 377 per cent to Rs 16.02 crore, up from Rs 3.36 crore in FY 2004-05.