Marketing a ‘traditional' edible oil — the ‘Idhayam' formula

It is worth roughly Rs 190 crore in annual revenues.

Harish Damodaranm Businessline

Virudhunagar (TN), Sept 9

The country's branded vegetable oil market is today dominated by the likes of Ruchi Soya, Adani Wilmar, Cargill, Bunge, Agro Tech Foods and KS Oils, dealing largely in imported material — palm, soyabean and sunflower — sold as refined oil or vanaspati.

The deluge of imported oils has led to the marginalisation of costlier traditional oils (mustard, groundnut, coconut, sesame), which are marketed mostly by regional and local players struggling against the onslaught of ubiquitous national brands.

There are exceptions, though, such as ‘Idhayam' — a brand synonymous with sesame (gingelly) oil, particularly in the South.

“We sell about 1,200 tonnes every month, of which, 80 per cent is within Tamil Nadu (TN) and 10 per cent in other States. The balance is exported, mainly for the Tamil diaspora in the US, Canada and Australia,” says Mr V.R. Muthu, CEO of V.V.V and Sons Edible Oils Ltd, which owns the brand.

Market share

According to him, ‘Idhayam' has a 60 per cent share of the branded sesame oil market in TN, where there are also others such as ‘VVS', ‘Anandham', ‘Sastha', ‘Anjali' and ‘Pashumark.' At an average ex-factory price of Rs 120 a litre , ‘Idhayam' rakes in roughly Rs 190 crore in annual revenues. V. V. V. and Sons also sells 300 tonnes a month of groundnut oil under the ‘Mantra' label, which is worth Rs 30 crore at Rs 80/litre.

“Our business is only in traditional oils that are expeller-pressed and filtered. We are not into solvent extracted and refined oils,” emphasises Mr Muthu.

‘Idhayam' retails upwards of Rs 130 a litre in TN, compared with RBD palmolein (Rs 45-50), refined soyabean (Rs 55-60) or sunflower (Rs 65-70) oils.

“Refined oils are a field where we cannot compete with the big names. It is better to be in a niche segment and target consumers who prefer oils having natural flavour and aroma that is lost during refining. They know the taste of oil that is physically extracted and filtered after crushing sesame-seeds along with 2 per cent palm-jaggery,” notes Mr Muthu.

Regional Popularity

Sesame oil is especially popular with Tamilians, “who, wherever they are, cannot do without it in their fish, brinjal, tomato or potato kuzhambu (gravy).”

One reason, then, why ‘Idhayam' sells predominantly in TN.

“We even source 45 per cent of our sesame-seed from the State, with 40 per cent coming from Karnataka and Andhra, and the rest from other regions,” says Mr Muthu.

In traditional oils, the manufacturer must have the patience to build volumes, while investing in one's brand and maintaining consistent quality.

For ‘Idhayam', the test came in late 2007, when a crop failure in China generated a spurt in export of sesame-seeds, pushing up domestic prices from around Rs 3,450 to Rs 4,850 for a 75-kg bag.

“As a result, our ex-factory price, which had never crossed Rs 100, soared to Rs 151/litre. But our brand's strength ensured that sale volumes fell by just 15 per cent,” recalls Mr Muthu.

Even today, the product moves fast enough so that “we keep not more than five days' stocks at our plant.”

Moreover, “nobody, including Reliance Retail, is supplied on credit.” Distributors get their delivery only after they had submitted their draft the previous morning.

CONFIDENT

Mr Muthu is confident of raising monthly sales of ‘Idhayam' by 50 per cent to 1,800 tonnes in the next two years.

“We are now promoting the use of sesame oil for improving oral health. Oil-pulling (rinsing the mouth with oil for 10-15 minutes) is a known folk remedy for preventing tooth decay and oral malodour. A Business Line article on an American Heart Association study, linking gum disease to cardiovascular problems, led me to sell Idhayam in 10 ml sachets at Rs 2 purely for oil-pulling,” he adds.

Marketing in sachets is also a way to make expensive oil more affordable.

Thus, while a one-litre ‘Idhayam' pouch costs Rs 136, a 30 ml sachet is available for Rs 4 and 100 ml for Rs 14.

Rainfall matches long-range outlook, and counting

Vinson Kurian
Businessline

Thiruvananthapuram, Sept 9

Overall monsoon performance has improved to 102 per cent and counting as of Thursday, matching the India Meteorological Department's (IMD) estimate for the entire season made in its long-range forecast.Widespread rainfall has been reported from the West Coast, West Madhya Pradesh and Vidarbha during the 24 hours ending on Thursday morning, the IMD said in an update the same evening.

DEFICIT IN EAST

It was fairly widespread over East Madhya Pradesh, Haryana, Uttarkhand, Sub-Himalayan West Bengal, Sikkim, Arunachal Pradesh, Assam, Andaman and Nicobar Islands and Lakshadweep. The deficit in East and Northeast India has since come down by a notch to 20 per cent, a rain-spell away from getting into the “normal” category despite nagging deficits in individual Met subdivisions in the region.

Jharkhand (-48 per cent) and Gangetic West Bengal (-35 per cent) continued to lead the pack.

Only Arunachal Pradesh showed a single-digit deficit of four per cent, which, thanks to IMD definition, is in the “normal” category (between -19 per cent and 20 per cent).

CROP UPDATE

Meanwhile, the latest agro-met advisory issued by the IMD said that the overall kharif crop condition continues to be “almost normal” except in East and Northeast India. Receipt of well-distributed rainfall in most of the States is expected to lead to a good harvest during the season.

Farmers in the East and the Northeast who could not sow during the earlier part of kharif season or lost the sowed crop due to deficient rain have been advised to make most of the recent rain and undertake sowing according to recommended contingency measures.

Crops partially affected due to less rainfall during earlier part of the season in some districts of Uttar Pradesh have now recovered due to a recent round of wet weather witnessed during the last few weeks.


Alongside, there have also been reports of adverse impact to crop from heavy rainfall in different parts of the country, the advisory said.Heavy rainfall on two days on a trot and resultant water-logging has affected soybean, groundnut, ginger and turmeric crops in low-lying areas in Imphal-West and Imphal-East districts of Manipur.

Submergence of crops, mainly kharif vegetables, has been reported from some areas of Upper Brahmaputra Valley zone of Assam.Harvest-ready green gram crop in Gulbarga and Yadgir districts in Karnataka too has been affected in this manner. Alternating bright sunshine for the last 15 days has led to pod shattering, leading to severe loss of crop.

Reports of water logging have been reported from Hyderabad, Medak, Rangareddy and Nalgonda districts in Telangana. Farmers have been advised to drain out excess water from the fields.Chilli and tomato crops have been adversely affected by heavy rainfall in Nagaland. Fruit rot in chilli and bacterial blight in tomato may have adversely affected the yield of the respective crops, the advisory said.

The East and Northeast, which witnesses annual rainfall between 1,300 mm and 2,800 mm, is passing through its second year of drought or delayed monsoon.

In contrast, the desert States in the north and west with annual rainfall of between 600 and 900 mm have seen a deluge this year.Satellite cloud imagery on Thursday afternoon showed the presence of convective (rain-bearing) clouds over parts of Gujarat, Bihar, Sub-Himalayan West Bengal, Sikkim, the Northeastern States, West-central and South Bay of Bengal and East Arabian Sea.

A rain alert valid for the next two days said that heavy to very heavy rainfall would occur at a few places over Gujarat.

Isolated heavy to very heavy rainfall has been forecast over Arunachal Pradesh, Assam, Meghalaya, Sub-Himalayan West Bengal and Sikkim during this period.

In Central India, isolated heavy rainfall would occur over West Madhya Pradesh, North Madhya Maharashtra, Konkan, Goa and Coastal Karnataka on Friday.

Godrej Agrovet sets up leaf, soil lab for oil palm

Hyderabad, Sept 9
New Courtesy: Businessline

Godrej Agrovet Ltd, part of the diversified Godrej group, today announced the launch of Leaf and Soil Laboratory near Vijayawada, which focuses on helping farmers in improving productivity in oil palm plantations.

More on cards

“With over 70 per cent of the country's oil palm cultivation centred in Andhra Pradesh, we have decided to locate the first such facility at Vijayawada. Based on the requirement in other States such as Mizoram where oil palm cultivation is centred, we may consider more such centres,” Mr R.R. Govindan, Vice-President, Plant Group Vertical, Godrej Agrovet, said.

Addressing a press conference, Mr Govindan said oil palm cultivation is taken up in much tougher conditions in India compared with South–East Asian countries such as Malaysia and Indonesia that get rain for over six months in a year.

Therefore, cultivation of oil palm in the country is lot more challenging, requiring expert guidance and assistance.

“The lab set up in Andhra Pradesh will provide latest knowhow, offer soil testing services and advise on how to limit the usage of fertilisers and nutrients. Typically, about 40-50 per cent of the total cost of the plantation goes to fertilisers. The lab helps identify the shortage of specific element of the 17-odd required for the crop. This will enable farmers to add specific ingredient to address,” Dr V. Madhava Reddy, Chief Agronomist, Godrej Oil Palm Ltd, said.

The Godrej Agrovet sees its oil palm business crossing Rs 100 crore this year.

Special thrust

Mr Govindan said that the company is laying special thrust on tissue culture and it is proposed to cover several crops in the next two-three years. Referring to edible oil imports, Mr Govindan said “as an industry representative, we have suggested imposition of 30 per cent duty. “While this increases prices, the duty could be ploughed back to assist development of plantations within the country.”

Fisheries board offers higher subsidy for innovative projects

The National Fisheries Development Board, Hyderabad, is offering hefty subsidies, as high as 40 per cent, for innovative fisheries units and projects such as sea bass culture and vennami culture, and entrepreneurs should make full use of such schemes to promote sustainable fisheries in the country, according to Dr. P. Krishnaiah, the Chief Executive.

He was speaking at the inaugural session of a one-day interaction meet between the industry and fisheries research institutes – Innovations and Industry – organised here on Wednesday jointly by the NFDB and the Central Institute of Fisheries Technology, Kochi.

Research and industry

He said the NFDB wanted to promote innovative marine cultures such as sea bass culture in association with research institutes. He said the NFDB had taken up cage culture in association with the Central Marine Fisheries Research Institute (CMFRI) and 50 cages had been set up for the purpose. Incubations centres were also being set up with the help of different research institutes to promote food processing units.

“The NFDB wants to play the role of a facilitator and a link between the research institutes and the industry. That is why we have organised this meet,” he said.

Fishing harbours

Dr Krishnaiah said the state of hygiene in the fishing harbours in the country was quite deplorable and the Visakhapatnam fishing harbour was no exception. “Our marine exports to other countries, especially European countries, would be badly hit if we do not maintain our harbours well. We should keep the fact in mind and make the necessary efforts,” he said.

Dr B. Meenakumari, Deputy Director-General (Fisheries) of the Indian Council of Agricultural Research, said a healthy fisheries sector was necessary for the food security of the country and also for large-scale employment generation in the rural sector. Therefore, the importance of fisheries could not be overemphasised. She said the research institutes and the industry should work in tandem to achieve the desired results in the sector.

She later inaugurated an exhibition showcasing the technologies developed by the various fisheries research institutes in the country.

Mr V. Padmanabham, regional president of the Seafood Exporters' Association of India, said such interaction sessions would go a long way in improving the fisheries sector.

In response to the remarks made by Dr. Krishnaiah on the Vizag fishing harbour, he said the harbour was located on the land belonging to the Visakhapatnam port trust (VPT). The VPT was more interested in shifting the fishing harbour to Bheemunipatnam, 25 km from Vizag, and taking back the land for other uses than improving it at the present site. He was critical of the attitude of the VPT authorities. He, however, agreed with Dr. Krishnaiah that hygiene should be improved at all fishing harbours in the country, including Vizag.

Dr T.K. Srinivasa Gopal, Director of the CIFT, Kochi, welcomed the gathering and heads of various fisheries research institutes also spoke on the occasion.

New Courtesy: Businessline

Rs 350 cr to boost coffee cultivation in Vizag

Andhra Pradesh government is promoting coffee cultivation in the agency areas of Visakhapatnam for which it would spend around Rs 350 crore over the next seven to eight years along with other organisations.

Since the coffee produced in these areas is of international quality, the government is encouraging coffee plantation by tribal here jointly with the Coffee Board, Integrated Tribal Development Agency (ITDA) and the National Rural Employment Guarantee Scheme (NREGS).


The agency areas, under the scheme, would take up coffee plantation and shade tree plantation in 104,000 acres. Of the total Rs 350 crore investment, the Coffee Board would provide Rs 62 crore. The remaining would come from NREGS while ITDA would monitor the plantation programme.

“Coffee plantation has been completed on about 12,000 acres. Once the total plantation is complete on 104,000 acres, we may get 8,000-10,000 tonnes of coffee seeds every year from here,” Coffee Board sources said.

At present, the Andhra Pradesh Forest Development Corporation (APFDC) cultivates coffee on about 10,000 acres in the reserve forest area. The coffee produced from this area had also received the ‘flavour of India fine cup’ award.

APFDC expects 900 tonnes of coffee production during this year. “Last year, the production was only 690 tonnes due to unfavourable weather, but this year, the production would touch 900-1,000 tonnes,” AN Gurumurthy, group manager, APFDC, told Business Standard.

He said the price this year will remain more or less the same as 2009-10, which was Rs 140 a kg.

New courtesy: Business standard

Poor rainfall could mar Bengal's rice output

The lower-than-anticipated rainfall so far in the southern districts of West Bengal could be a dampener for the major kharif crops such as paddy and jute grown in the State. Rainfall is deficient by about 30-35 per cent in the southern districts, while the northern districts have received excess rainfall......for more details of the news visit

http://www.thehindubusinessline.com/2010/08/12/stories/2010081252752200.htm

Monsoon showers bounty on AP

If drought was the problem for Andhra Pradesh farmers last year, this year, there can be no complaint on that count. But the recent heavy rains that is being witnessed of late is surely a source of worry......for more details of the news visit the following link

http://www.thehindubusinessline.com/2010/08/12/stories/2010081250742300.htm