Cases

Feasibility Study for Entering Port Based Palm Oil Refining Business

Challenge

The client, a leading global agribusiness company, wanted to evaluate entry into port based refining for palm oil in India.

Our Approach 

To evaluate the market for palm oil business in India and develop an entry strategy for the client, UC adopted the following approach:

  • Developed a spreadsheet model based on the framework capturing the impact and inter-linkages of the regulatory framework of the industry, excise and other benefits available at specific ports, capital expenditure and prices of major products and by-products
  • Conducted a detailed study of the application industries for by-products and analysed the key trends
  • Conducted a statistical analysis of the historical data for different ports and built scenarios
  • Analysed sensitivities of key input parameters on the EBITDA margins and IRR
  • Determined the conditions under which the venture becomes profitable

Impact

The client was able to build a detailed understanding of the economics of palm oil refining business and also received an entry strategy for the market.