New York: US agribusiness giant Cargill Inc said on Tuesday that it is investing Rs 400 crore in a new corn milling unit in Karnataka and Rs 100 crore on expanding capacity at three of its existing edible oil plants in India.
The $134 billion US company, one of the world's biggest commodity processors and traders, is acquiring land at Davangere in Karnataka, the top corn-producing state in India. Cargill India already produces and markets vanaspati in India under brands Rath, NatureFresh Purita and Gemini.
"We aim to start a corn milling unit in Karnataka with a daily 800 to 1,000 tonnes processing capacity by 2014. It will be our single largest investment in India," Siraj Chaudhry, chairman of Cargill India, told reporters on Tuesday.
The first phase of the processing unit at Davangere will be up and running by the third quarter of 2014.
"Our plant will cater to the growing demand for modified starch in the processed food segment," he said.
Demand for modified starch produced from corn as a sweetener and thickener for the food and drinks industry is growing at 10-15 percent in India's booming processed foods industry.
Cargill also aims to increase its cooking oil refining capacities in the three plants that it runs in Gujarat, Maharashtra and Orissa. It wants to raise its current daily refining capacity by a quarter to 5,000 tonnes a day, investing about 100 crore over the next two years, taking its total India investment to Rs 500 crore.
India is the world's second heaviest user of cooking oil after China and the world's largest palm oil importer. Since India's own edible oils output just meets half its domestic demand, it imports palm oil heavily from Indonesia and Malaysia.
Cargill has real-time insight into dozens of markets and uses it to add value in all their businesses. Clearly, the company is looking to expand quickly in India through acquiring new cooking oil and wheat flour brands. It just bought Wipro's popular Sunflower vanaspati brand for an undisclosed amount. Trade analysts pegged the probable sale price at Rs 40 crore.
Founded in 1865 by William Cargill, son of a Scottish sea captain, the Minnesota-headquartered agricultural-commodities giant is in its seventh generation of family ownership, a record unmatched by any other major US firm.