Defining an Entry Strategy for Setting Up an Edible Oil Refinery at an Indian Port

supply chain

Client Challenge

The client was a diversified commodity player engaged in producing, trading, marketing and logistics activities for more than 90 commodities globally including agricultural products. The top management was willing understand the prospect of expanding its value chain presence in soya bean and sunflower edible oil industry from trading to refining and marketing of these oils. For this purpose, the client had identified two port-based locations on western coast as potential locations for setting-up refinery operations which were to be comparatively assessed.

Our Approach

To develop an assessment of market opportunities in this industry and location validation of the two ports, UC Strategy adopted the following approach:

  • Assessed the current refining industry based on geography, competition and business segments
  • Assessed addressable demand potential from identified locations for different business segments
  • Assessed the supply dynamics at the identified locations
  • Assessed the economics and profitability of the business at proposed locations
  • Analyzed the current and future scenario of potential government regulations that will affect the company‚Äôs business
  • Defined the potential entry options for the business and criteria to assess them

For this purpose, the UC Strategy team conducted extensive primary research with more than 80 respondents (including refineries, transport operators, brokers, CHA agents, storage operators, plant and machinery set-up companies and real estate agents) across all regions of India.

Our Impact

For Established potential for growth for a new entrant in the industry given the demand-supply deficit in the market, UC Strategy recommended to adopt a geographic and segment specific selling approach, especially to gain market share more effectively. Setting-up a soybean oil refinery, Kandla is the preferred location to cater the demand in west and north market and setting-up a sunflower oil refinery, JNPT is the preferred location to cater the demand in west.

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