Cargill  Buys Edible Oil Refinery in Andhra Pradesh to Expand its Footprint

Cargill, the world's largest food company, has purchased an edible oil refinery in Nellore, Andhra Pradesh, in order to expand its footprint in Southern India and strengthen its preexisting supply chain in the nation. 

According to the company, this will require a total investment of around $35 million (250 crore-270 crore) to acquire, upgrade, and greatly expand the facility's edible oil production capacity. 

Cargill's ability to deliver refined palm oil, palm olein, vanaspati (hydrogenated vegetable oil), sunflower oil, and other value-added products would be increased as a result of the newly acquired refinery. The Krishnapatnam Port facility is expected to be completely operational by May next year. 

The company's initiative comes at a time when customers are increasingly gravitating towards organized brands post the pandemic. 

According to Piyush Patnaik, Managing Director of Cargill's edible oils business in India, this acquisition is consistent with the company's specialized and localized market approach for Asia. 

Larger footprint in the south 

He further said that southern India is the country's largest market for sunflower oil, accounting for over two-thirds of the overall consumption, and that it is currently underserved. 

"This is a crucial acquisition for us that will allow us to grow our footprint in the Southern area. We already have a significant presence in Karnataka under the Gemini brand. So, although this purchase will help us further reinforce our presence in Karnataka, it will also help us extend and develop a much larger footprint in Andhra Pradesh, Telangana, and Tamil Nadu," he added. 

According to the company, it already has a significant presence in the Western, Northern, and Eastern sectors. 

"In pandemic times, there has been an acceleration in the shift towards trusted packaged branded products in the edible oils space. This facility will enable us to produce and package our edible oil brands not only for household consumers, but also to better serve bakery and foodservice customers in the Southern area," Patnaik said. 

Cargill has been running its edible oils business in India since 2001. NatureFresh, Gemini, Sweekar, Leonardo, Rath, and Sunflower are among the edible oils and fats brands in its portfolio.