India?s domestic edible oil industry is slowly moving towards a phase of growing import dependency amid stagnant domestic oilseed production and rising consumption. In a interview with FE?s Sanjeeb Mukherjee, Pranav Adani, managing director of Adani Wilmar, India?s biggest seller of packaged edible oils by volume, throws light on issues related to the industry and his expansion plans. Excerpts:

India?s edible oil industry is going through a critical phase with imports rising. However, domestic production hasn?t shown a tangible increase in the last few years. We are now importing almost 10 million tonne of edible oils annually, which was 4-6 million tonne a few years back. How do you see the level of imports in coming years and also the reasons for the same?

Yes, driven by widening demand-supply mismatch, India?s edible oil imports have more than doubled in previous four years to over 8.8 million tonne in 2010-11 oil year. The import should be growing at 6-7% per annum. The level of import can go up to 12 million tonne by 2015. The rise in imports is led by a galloping increase in demand for edible oils and a near stagnant oilseeds production in the last decade due to minimal growth in acreage. One more important factor for amplified import dependency could be India?s oilseed crop is cultivated at under irrigated areas which often lead to lower oilseed productivity than the global average.

The mix in India?s edible oil imports in the last few years has largely been in favour of palm oil, but with palm prices expected to rise in coming months, do you see this mix changing in favour of soyaoil in 2010-11 oil marketing year. What could be the proportion of soyaoil and palm oil imports in 2010-11.

Internationally, palm oil has always been a very big segment and recent three-four years? trend has resulted in palm oil becoming a very huge category in India as well. The increase in palm prices will not significantly hamper quantity of imports. However, in case of soyaoil, though the popularity is on rise, the proportion of imports would be in the same ratio.

Do you think India?s edible oil imports will get costlier this year?

Augmentation of prices will definitely make India?s edible oil imports more dearer in upcoming financial year. It may get 12-15% costlier in coming 4-5 months, although it largely depends on supply ? demand front.

What is the estimate of domestic oilseed and edible oil production this year (2010-11)?

India?s total oilseed production for 2010-11 is about 34.9 million tonne, up 3.2 million tonne over the 2009-10 production estimates due to monsoons and other factors.

Of late, many Indian edible oil companies have been looking to buy plantations, mainly palm in foreign countries (Indonesia and Malaysia). Do you have plans to buy plantations abroad? What kind of size is the group looking at and in which country.

Adani Wilmar currently has 16 strategically located plants across India in different states such as Gujarat, West Bengal, Karnataka, Rajasthan, Andhra Pradesh, Madhya Pradesh and Maharashtra.

At the moment, we are trying to consolidate. But if we get any such opportunity in future, we are open to it.

Does the current state of Indian edible oil industry with large unused capacities, warrant a consolidation among major players. What kind of shape it will take and is your group, too looking to buy domestic edible oil company to expand and widen its reach??

We definitely see a phase of consolidation in the industry. Small players will give way to large players in the market. The per capita consumption (12.7 kg/ year) of edible oil is growing but it is still lower than many Asian countries leave alone the developed world. Hence, there is immense scope for growth, this combined with a consumer shift from loose to packaged oil at a rapid pace. National players will certainly have a better say in the industry in near future.

In last 2 years Adani Wilmar Limited has acquired several companies and we have a robust expansion pipeline for the next five years.

Packaged edible oils is growing at a rate of 14.3% annually and is presently valued at Rs 19,000 crore. What prospects you see for this segment in future?

I strongly believe that the shift in consumer preference for branded edible oils has brought about this vital growth of the packaged edible oil segment in the last few years, and it is clearly visibile that the consumers have turned more quality and health- conscious. Adani Wilmar as a market leader is constantly upgrading its product to maintain its number 1 position.

Are you planning to launch any new brands in edible oil segments? What are your plans to strengthen the current edible oil brands from Adani Wilmar?

We have recently launched Fortune Plus?a healthy edible oil brand that gets absorbed 17% lesser than any other edible oil brand in the market. At the moment our efforts are focused on spearheading the growth of brand Fortune Plus to all 5 lakh + population towns of India during the first phase of the launch.

Investments and returns are part of a business strategy. At Adani Wilmar Limited our investment are focussed on long term returns and we are planning a substantial investment of Rs 10 crore for particularly Fortune Plus.

Our core focus has always been to serve the need gaps of ever evolving Indian Consumer. Our research shows that consumers are looking for healthier but affordable cooking oil. Adani Wilmar Limited has a diverse product portfolio with acclaimed brands. Each brand has a specific target market and our prime strategy is to not only introduce a product in the market but to educate the consumers about its benefits.

What are your revenues from packaged edible oils and what kind of growth are you seeing in 2010-11 financial year after the new launches.

The total Indian edible oil industry, including refined and non-refined, is estimated at 15 million metric tonne. Our market share in refined oil is 18% as on 2009-10. Presently, our revenues from packaged edible oils are Rs 4,000 crore per annum and our flagship brand Fortune contributes to more than 50% of our packed oil business. With the launch of Fortune Plus recently, we intend to increase our share by 10% to further strength our market share.