Sydney, Sep 9 (Inditop.com) An Indian consortium led by Bhoruka group, a diversified industrial house headquartered in Bangalore, is investing Austraian $63 million ($54 million) in a new edible oil refinery at Wagga Wagga, 470 km south-west of Sydney in New South Wales.
The agribusiness venture has been named Riverina Oils and Bio Energy and ranks among the largest value-added greenfield investments by an Indian company in Australia’s eastern seaboard, the promoters said.
The plant will have an annual capacity of 170,000 tonnes of oil, to offer farmers in the area new crop opportunities with plans to initially crush canola, safflower, cottonseed, soybean and sunflower seeds.
“It is our first overseas venture,” said the Bhoruka group chairman S.N. Agarwal, adding the construction of the new refinery will start Sep 11 and generate annual revenues of Australian $150 million ($129 million) once it is operational.
“When I visited the region some two years ago, I was amazed to see the vast agricultural fields, few people and almost no building. I realised the region had great potential for agribusiness,” Agarwal told Inditop.
“Production is expected to start by October 2010,” said Agarwal, who is also Riverina Oils chairman, adding the company will also export some 65,000 tonnes of refined oil annually to India, Japan, some parts of Asia, Europe and the US.
“India is the world’s largest importer of edible oil. That makes the Indian connectivity of this project hugely important, both in terms of the investment and exports,” said the Melbourne-based chairman.
According to him, it was cheaper to ship edible oil to overseas markets from Australia. In India, he said, oilseeds imports attract 35 percent import duty, whereas edible oil can be shipped in duty-free.
The other partners of the project include Ravi Uppal, who is executive director heading the power division of engineering and construction major Larsen and Toubro. The State Bank of India is funding the venture, its first for a greenfield project in Australia.
“Given the logistics, manpower, infrastructure and raw material, it (Wagga Wagga) seemed like the right place,” said Uppal, founding partner and managing director of Riverina Oils.
The promoters said the project will benefit the rural town with by creating of 65 direct and 500 indirect jobs in the first phase. Some 15,000 truckloads or railway containers will be needed annually to ferry 350,000 tonnes of raw materials and products.
Riverina Oils will also produce 105,000 tonnes of vegetable protein meal annually for the Australian poultry, dairy and animal feed industry.
“Once the plant is up and running, we expect to spend more than Australian $60 million ($51 million) a year buying raw materials from the Riverina region,” Saxena said.
He said farmers in the region will have to plant an extra 75,000 hectares of crops to deliver 100,000 tonnes of oilseed to the crushing plant, while another 50,000 hectares would be cultivated in other parts of Australia.
“Soybean will replace imports and give farmers a summer crop,” said Saxena, who has run a large food and agribusiness ventures for multinationals earlier, including Unilever and Bakrie, and for India’s Thapar Group.
“Safflower oilseed will give farmers an option to plant up to August on a fixed price contract. It’s a product which is both water-efficient and good for crop rotation.”
The Bhoruka Group, which has interests in hydropower, industrial gasses, transport, IT bparks and steel, is also keen to explore the use of biomass, such as the residue from vineyards, orchards and sugarcane farms, to generate power.
