ITC Explores Possible Re-entry Into Edible Oil Business With Wilmar Stake: Reports

In a surprising turn of events, it has been reported that Kolkata-based conglomerate ITC is contemplating a potential re-entry into the edible oil business, nearly two decades after it divested its edible oil plant in Andhra Pradesh to Adani Wilmar. According to media reports, ITC's interest in Adani Wilmar has been sparked by its growing focus on branded commodities.

According to the media reports, Adani Wilmar, a joint venture between the Adani Group and Singapore-based Wilmar Group, has been considering the sale of the Adani Group's nearly 44 per cent stake in the company. The Adani Group's purported move to divest its stake aligns with its strategy to redirect attention to its energy and infrastructure businesses.

There has been no confirmation from the Adani Group or ITC so far. 

ITC, known for products such as Sunfeast biscuits, Aashirvaad atta, and Yippee noodles, has been actively seeking opportunities to expand its food business. Branded commodities, witnessing a shift from unbranded to branded products in recent years, have attracted the attention of both national and regional players in the FMCG sector.

Although ITC exited the edible oil business more than two decades ago by selling its controlling stake in ITC Agro Tech to ConAgra Foods (now Conagra Brands), sources suggest that the company may be open to re-entering the sector, particularly if it involves acquiring a robust brand and processing plants.

Adani Wilmar, a leading player in the edible oil market, boasts an FY23 topline and bottom line of Rs 58,185 crore and Rs 582 crore, respectively. The joint venture is well-recognised for its Fortune brand of edible oil and food products, reaching over 113 million households through 23 manufacturing plants and 5,700 distributors.

The Adani Group is reportedly in discussions with various potential stakeholders for the sale of its stake, estimated to be valued at around USD 2.5-3 billion (Rs 20,000-24,000 crore). Some of the entities in talks include Wilmar, multinational consumer goods companies, and financial investors like GQG Partners and Qatar Investment Authority (QIA).

India's edible oil market features prominent domestic players like Agro Tech Foods, Cargill India, Bunge India, Emami Agrotech, Marico, and Patanjali Foods, reflecting the dynamic landscape of the sector.