A successfully running refined edible oil manufacturer looking for investment for expansion. They are into manufacturing of refined palm oil and sunflower oil, which is used as edible oil in Andhra and Telangana states. They are planning to establish their own brand name in consumer packing for both these oils. The total market size of both edible oils in these states is about 1 lakh mt for palm oil and 40 thousand mt for sunflower oil. Consumer packaging market is about 30% which is growing at 20% per annum. Projected sales for consumer packing is about 1000 mt for palm oil and 300 mt for sunflower oil. Current production capacity is 3000 mt of palm oil, out of which 2000 mt is sold in bulk tankers and 1000 mt in consumer packing. The net profit margin is of Rs 600 per mt after all expenses (at worst case and best case profit would be 1200 Rs per mt). 3000 x Rs 600/mt = Rs. 18,00,000 per month and pay back period is 2 years. Investor can exit after 2 years with 100 % return. The company is looking for INR. 5 Crores as an investment to acquire another refinery from the same region. The target refinery already has all the infrastructure established as well as access to raw material and local market along with refining capacity 100 tpd.


Investment for horizontal expansion

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