Financial Daily from THE HINDU group of publications
Saturday, Jan 26, 2002
Agri-Biz & Commodities
Corporate - New Projects
HLL to expand wheat project
MUMBAI, Jan. 25
ENCOURAGED by the benefits accruing from its pilot farm project at Hoshangabad in Madhya Pradesh, Hindustan Lever Ltd (HLL) is planning to expand the model to other wheat-growing states.
Having started in wheat with 250 acres of land at Hoshangabad in 1999, the farm project has been extended to 1,000 acres now by the project implementers, which include Rallis India Ltd as the agricultural input provider, ICICI as the finance provider and HLL as the procurer and end user of the wheat.
``We are looking at expanding this project to Punjab, a major wheat-growing State. We want to look at all the wheat growing States,'' Mr Gunendar Kapur, Executive Director-Foods, HLL, said.
Taking a cue from this project, HLL has commenced an experiment with tomato farming in Punjab. ``We have started an experiment in which we are crushing tomatoes at the field to minimise losses. We are using mobile crushing units mounted on trucks to carry out this operation,'' Mr Kapur said adding that HLL is currently working with three such units. This is for HLL's Kissan range of products.
Although, direct procurement is a major issue with foodgrains, HLL has been able to achieve savings in handling and transportation costs through direct procurement of wheat in the Hoshangabad project. According to Mr Kapur, four per cent of wheat is lost during transit on account of leaks.
Mr M.S. Banga, Chairman, HLL, has been reiterating that there are restrictions with regard to procurement. He has also spoken of HLL working with the government to seek exemption from some of these restrictions.
These procurement issues are critical for HLL that has a major presence in foods.
Within the foods category, wheat is going to be a major initiative, Mr Banga had said following the announcement of the company's full year results on Tuesday. ``HLL has a whole host of products in wheat waiting to hit the markets,'' he said. Moving down the value chain from Annapoorna Atta, HLL has launched its ready-to-eat chapattis.
Through the pilot project at Hoshangabad, HLL has been able to increase wheat productivity by 70 per cent and improve the cosmetic quality of grain, according to Mr Kapur. However, improvements in the chemical composition of the grain were still a long way off, he said.
At the project level, defaults by individual farmers are issues yet to be tackled, as there are no enforceable rules in place.
According to him, procurement is not an issue with tomatoes as it is in the case of foodgrains. HLL is carrying out this project alone.
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