Adani Wilmar Limited (A)

Abstract

The total market size for edible oils was estimated to be 13 million tons out of which imports amounted to about 4 million tons. This made India the largest importer of edible oils in the world. Various edible oils are consumed in India depending on the regional tastes and preferences. A differential in the duties on oil seed and oils made it favorable to import edible oils instead of oilseeds. Similarly, a differential duty between the refined oil and the raw oil encouraged the import of raw oil in order to boost the domestic refineries. Adani Wilmar was a part of the Adani group, which started as a trading mainly into exports of commodities. The group had recently entered into the infrastructure sector with the building of the Mundra port. The group had formed a joint venture with Wilmar Trading of Singapore to enter into the edible oil business. The company was setting up a refinery with capacity of 600 metric tonnes per day. It planned to sell half of the production as bulk oil and the rest as packed oil. The company viewed supply chain management as one of the important means to get competitive edge. Approximately 70% of the total logistics cost was accounted for by transportation cost. Some of the key decisions that the company faced with was the location of the warehouse, more choice and routing.