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Indian consortium invests in regional Australia to produce edible oil PDF Print E-mail

© Neena Bhandari, Indo Asian News Service

ImageSYDNEY, September 9 (IANS): An Indian consortium led by one of India’s leading transport and energy companies, the Bhoruka Group, is investing AU$63 million in an edible oil refinery in Wagga Wagga, 470km south-west of Sydney in the state of New South Wales (NSW).

The agribusiness venture, Riverina Oils and Bio Energy (ROBE) Pty Ltd., is described as India's largest value-added greenfield investment on Australia’s eastern seaboard.

The refinery’s construction will commence on Friday, September 11. Besides offering major new export opportunities for Australian farmers, the plant will create jobs and generate annual revenue of AU$150 million.

“It is our first overseas venture. When I visited the region two years ago, I was amazed to see the vast agricultural fields, few people and almost no buildings. I realised the region had great potential for agribusiness and decided to invest here,” Bangalore-based Bhoruka Group Chairman, S. N. Agarwal, told IANS.

Agrees Melbourne-based founding partner and Managing Director of ROBE, D D Saxena. "We felt from logistics, manpower, infrastructure and raw materials it seemed like the right place”.

The 170,000-tonnes a year oilseed crushing and edible oil refining plant will offer farmers in the area new crop opportunities. Initially, the ROBE plant will crush canola, safflower, cottonseed, soybean and sunflower seeds.

“The production is expected to start by October 2010. We source the raw material, crush and refine oil at Wagga Wagga, with equipment sourced from all over the world”, Agarwal, who is Chairman of ROBE, told IANS.

The company will export some of its 65,000 tonnes a year of refined vegetable oil to food industry customers in India, Japan, and other parts of Asia, Europe and the United States.

“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 the export market,” Saxena, told IANS.

ROBE will also produce 105,000 tonnes a year of vegetable protein meal for use in the Australian poultry, dairy and animal feed industry.

Agarwal’s Bhoruka Group, which is one of the largest private power producers in India, is also keen to explore the possible use of biomass, such as the residue from NSW’s Riverina vineyards and citrus orchards or Queensland sugar cane, to generate power.

The project would benefit this rural town with the creation of 65 direct jobs in phase one, and up to 500 indirect jobs in the construction, transport and logistics sectors. Almost 15,000 truckloads or rail container movements a year would be needed to carry 350,000 tonnes of raw materials and finished products.

“Once the plant is up and running, we expect to spend more than A$60 million a year buying raw materials and other products from the Riverina region,” Saxena said, who envisages farmers in the region will plant an extra 75,000 hectares of crops to deliver 100,000 tonnes of oilseed to the crushing plant and another 50,000 hectares will be planted in other parts of Australia.

“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. Soybean will replace imports and give farmers a summer crop,” said Saxena, who has earlier run large food and agribusiness ventures for multinationals such as Unilever and Bakrie, and for India’s Thapar Group.

Both Agarwal and Saxena say, Australia has high level of technical skills in agriculture and it is much cheaper and easier to value add to the raw material here, convert it into oil and then ship it overseas direct into the export markets. For example, in India, oil seeds incur 35 per cent import duty whereas edible oil has no duty on it.

ROBE’s founding partners include Ravi Uppal, who is executive director heading the power division of Larsen & Toubro and was formerly headed the Asia Pacific operations for Swiss energy infrastructure major Asea Brown Boveri (ABB); and California-based Lotus Ventures.

State Bank of India is providing finance to ROBE, which is the bank’s first greenfield financing project in Australia.

© Copyright Neena Bhandari. All rights reserved. Republication, copying or using information from any www.india-voice.com content is expressly prohibited without  the permission of the writer and the news agency through which the article is syndicated. 

 
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