Tata Chem to foray into bio-fuels, agri-produce distribution
The Hindu — June 24, 2007

Tata Chemicals, which has lined up a one billion dollar investment over the next 2-3 years, will foray into bio-diesel, fresh fruits and vegetables production and distribution as part of its expansion strategy.

Unveiling the company's plans, Tata Chemicals' managing director Homi R Khusrokhan, told PTI it has set up jatropha cultivation in five regions of the country for production of bio-diesel.

Besides, it plans to cultivate shorgam for making ethanol, he said, adding to begin with it would set up a plant at an investment of Rs 40-50-crore in eastern Maharashtra.

"Once it is successful, it will be replicated elsewhere in the country for large-scale manufacture of ethanol for blending with petrol," Khusrokhan said.

"Each plant will take about 15-18 months to be set up," he said, adding the first plant should be ready by end-2008.

On bio-diesel, he said jatropha cultivation took at least four years and once the plants matured, an oil mill would be set up for extraction of jatropha.

"Jatropha plants have a life-cycle of 35-40 years after the initial four-year period for its growth and it can be grown on wasteland. About 14 per cent of India's land mass is wasteland which is enough to meet the requirements of bio-diesel for mixing up to 15 per cent diesel," he said.

On shorgum cultivation, Khusrokhan said it could be grown in those areas where jowar is cultivated and the advantage is that there could be three crops in a year.

"Shorgum can also be grown as a crop in between two major crops of food grain as it requires only a four-month cycle," he said.

Elaborating on Tata Chemicals' plans to enter fruits and vegatables distribution, he said initially the plan is to build a distribution chain in Punjab and West Bengal. This would be gradually extended to other states.

"In 3-5-years, we plan to have 30-40 such centres across the country," he said, adding the distribution chain includes setting up cold chain and entering into contract farming with farmers for assured supply of fruits and vegetables.

Ruling out the possibility of Tata Chemicals entering the retail business, Khusrokhan said the company would be only in the distribution network and was willing to sell to any retail major, including Reliance.

It has already formed a 50:50 joint venture with an Irish company for this business which is named Khetse Agri Produce India Pvt Ltd.

Asked why the Tata name does not figure in the business, Khusrokhan said the Tata name would be incorporated after a year or two, as was the practice with most joint ventures. "The company has to earn the Tata name," he added.