Adani silos to break even over next 5-6 years

Written by Sandip Das | New Delhi, Oct 16 | Updated: Oct 18 2008, 05:19am hrs
Adani Agri-Logistics, an arm of the of Adani group, which built the state-of-the-art silos for bulk handling and storage of foodgrain in collaboration with state-owned Food Corporation of India (FCI) for the first time in the country, expects to break over the next 5 - 6 years. As a part of a pilot project, the FCI had entered a build,own and operate (BOO) agreement for 20 years with AAL for setting up two silos at Moga in Punab and Kaithal in Haryana in 2005. The silos commenced operation during the previous rabi procurement season where about 3 lakh tonne of wheat was procured on behalf of FCI. The company has invested Rs 650 crore for building the two base-silos and five field depots (at Chennai, Coimbatore, Bangalore, Navi Mumbai and Hoogly), which have combined storage capacities to the tune of more than 6.5 lakh tonnes of foodgrain.

We hope the project starts paying for itself over the next 5- 6 years, Atul Chaturvedi, CEO, Adani Enterprises, told FE. As per the twenty-year agreement with the FCI, the state-owned procurement major would pay a rental of Rs 2,000 per quintal per annum for procurement, storage and transportation of wheat to be delivered at various centres. The silos at Kaithal, spread across 32 acre, procured more than 1.5 lakh tonne of wheat during the rabi season. As an incentive, the farmers bringing in agricultural produce were paid Rs 19.70 per quintal besides the minimum support price (MSP) of Rs 1,000 per quintal.

Foodgrain transported from the base depot is stored in bulk at the field depots with similar preservation and storage facilities. The grain is delivered to the FCI both in bulk and bagged form as required, at the field depots.

However, a FCI official said that the agency paid around Rs 35-Rs 45 per quintal per annum for procurement and storage of foodgrain in conventional storehouses. In a conventional storage house, there is significant loss of foodgrain due to poor preservation facilities, a FCI official admitted.