Godrej, Malaysian co sign MoU for palm plantation
For setting up a joint venture to promote oil palm plantation in India, a memorandum of understanding (MoU) was signed by Godrej Agrovet Ltd (GAVL) and IJM Plantations Berhad (IJM), a listed Malaysian company, in the presence of the Malaysian Minister for Plantation Industries and Commodities, Datuk Peter Chin Fah Ku.
Palm plantation
This newly incorporated joint venture company will carry on the activity of palm oil plantations in India.
The MoU, which contemplates the signing of the agreement in 3-6 months, sets out the areas of collaboration such as procurement of palm oil planting materials, raising nurseries, supply of seedlings and provision of agronomic assistance to farmers in India.
The new joint venture company, which is contemplated to invest a couple of hundred crores, will have an equity holding by both the companies. The joint venture will have a five-year business plan. Mr Adi Godrej, Chairman of Godrej Group, said that the already profitable palm oil plantation business of GAVL will benefit further with the expertise and technical know-how of IJM, which has been in business since 1985.
Bio-diesel
GAVL has existing plantations in Andhra Pradesh, Goa and Karnataka, which will now be extended to Gujarat, Orissa and Mizoram.
IJM has obtained a licence for bio-diesel plant in Malaysia, which will start production by July 2007.
At the 10th Globoil convention here, the Malaysian Minister has said that he not only perceives India as the major customer of Malaysian palm oil but also wants to ensure cross-investments between the two countries.
While appreciating the Indian Government’s concern for protection of domestic producers’ interests, Mr Chin regretted that owing to high tariff rate on crude and refined palm oil, exports from Malaysia declined by 70 per cent since 1999.
He was optimistic that the narrowing price difference between palm and soya oils will help stabilise the market and will be good for long-term investments.
Adding that the conclusion of the ongoing Free Trade Agreement (FTA) will help improve trade, the Minister sought to promote Malaysian Tourism.
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