The Hindu : Kerala News : Oil Palm India gears up for expansion

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Sunday, Dec 16, 2007
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Kerala

Oil Palm India gears up for expansion

Staff Reporter

Rs.3-crore plant to further boost revenue

for HIGHER EARNINGS: A view of Oil Palm India Limited’s Yeroor plant, near Kollam.

KOLLAM: The public sector Oil Palm India Limited (OPIL) has embarked upon an ambitious expansion programme by clearing a project to commission a kernel oil plant at the company’s Yeroor unit, near Kollam.

The Rs.3-crore plant will serve to further boost the revenues of the already profit-making OPIL. The OPIL is a joint venture company of the Central and State governments. It is the only public sector palm oil producer in the country. As of now, the company produces crude palm oil from the pulpy portion of the oil palm fruits.

Crude palm oil is the source for palm oil and palmolein. The kernels of the fruit are being sold to the private sector. The kernels are raw material for another grade of oil which has cosmetic applications and fetches a price double that of crude palm oil. OPIL board member S. Jayamohan said the kernel oil smells and tastes like coconut oil but has high viscosity.

The present market price of kernel oil is Rs.69 a kg. The annual quantity of kernels at OPIL’s disposal is roughly 2,300 tonnes.

These kernels are now being sold at the rate of Rs.14 a kg. Mr. Jayamohan said the kernel oil plant would qualify for a subsidy of Rs.1 crore from the Centre.

During 2005-06, the OPIL made a profit of Rs.13 crore. It sells crude palm oil at a record price of Rs.39 per kg. Till the first week of December this year, the company has processed 33,898 tonnes of oil palm fruits.

The bulk of the fruit bunches, roughly 30,500 tonnes, come from the OPIL’s own estates. The remaining is procured from other sources, including private farmers.

With a capacity to process 20 tonnes of crude palm oil an hour, the company’s production this year stands at 6,773 tonnes. February to July is the peak season for oil palm harvest and during this period, the company operates at full capacity utilisation. The company provides 70 per cent subsidy for starting oil palm plantations. Saplings are also supplied.

Mr. Jayamohan said the import of palmolein could badly affect the company’s prospects.

During 1999, when palmolein import was permitted with heavy import duty cuts, the company faced problems since the price of crude palm oil dipped to Rs.13 a kg.

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