Coconut oil: Mushrooming extraction units in Kerala sensing demand 

While his business model was sound, there was something he did not anticipate; that several others would also think of the same idea.

Published: 28th November 2018 08:22 AM  |   Last Updated: 28th November 2018 08:22 AM   |  A+A-

Express News Service

KOCHI: When Antony Joseph decided to start a coconut oil extraction unit using rotary chucks adjacent to his house in Pallikkara village in Ernakulam some two months ago, his business rationale was simple: Reports of adulterated coconut oil flooding Kerala markets and the recent government decision to ban 45 brands of coconut oil would push customers towards buying unadulterated oil.

While his business model was sound, there was something he did not anticipate; that several others would also think of the same idea. Many people set up coconut oil extraction business in recent months. “After I started the rotary chuck oil extraction unit, almost seven to eight units – both rotary and oil expellers – have come up within 4-5 km radius of my house itself,” says Joseph.

In June, the Food Safety Commissioner banned the statewide sale of coconut oil brands made by 45 companies after tests revealed adulteration. This led to the mushrooming of units for oil extraction, say industry officers.

Sashi Kumar is one of the many who ventured into the business when he set up his rotary chuck coconut oil extracting unit near Thammanam here. But he says the business was not flourishing as anticipated.
“I have realised that people are ready to buy lesser quality or adulterated oil for `40-50,” he says, adding he is finding the going tough as there is not much demand for pure, unadulterated coconut oil. “I was under the false notion people in cities pay a premium for quality products,” he says.

Thalat Mohammed, president of Cochin Merchants’ Association, says there are about 400 oil mills registered with the association. He, however, admits several small units have started with two expellers, 3-4 chucks and the like in recent months, especially near Muvattupuzha, Kothamangalam, Thodupuzha and Kattappana. “A big problem these units face is getting good quality copras. Managing rotary chucks is also another issue as it needs regular servicing,” Mohammed says.

Competing with Kerafed
Such small coconut oil extraction units are competing with Kerafed, the state government enterprise which is the leading producer of coconut oil in India.

Kerafed chairman J Venugopalan Nair says the firm crushes nearly 100 tonnes of copras per day at its units in Karunagappally and Kozhikode.

“A large number of small units have come up in the state recently. However, as far as I know, many of them sell adulterated oil by mixing other stuff, such as dried rubber seeds,” he says. Though both Joseph and Sashi Kumar vouch they sell unadulterated oil, they admit there may be others who sell adulterated coconut oil even from their extraction units.

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