SEAF India Agribusiness Fund has invested in Abhay Cotex Private Limited.

The funds raised will be used by the company to open its second processing plant and for exploring the licensing of its technology.

Bert van der Vaart, co-founder and chairman of SEAF said, "Abhay Cotex’s technology has the potential to substantially improve the productivity of India's dairy production. We are delighted to partner with the Company in its path to rapid growth. By saving on water and energy costs, and producing superior grade DOC, the company has the potential to greatly boost the productivity of dairy cows at just the time when demand for dairy products in India is increasing significantly. The Company’s focus on making the most out of the cottonseed places it in a solid position to benefit from its other products as well, where it is achieving virtually zero waste."

Transaction Reference: Dealcurry

Founded in 2007 by Ashish Mantri, Jalna-based Abhay Cotex extracts edible oil, high protein de-oiled cake (DOC) for cattle feed, linters and hulls from cottonseed. It has a cotton seed processing capacity of 1,80,000 TPA.

Company claims that its de-oiled cakes are better than those made by conventional technologies. It also claims that it has implemented a Single Stage Cottonseed Extraction (SSCSE) followed by Online Miscella refinery technology having a capacity of 600 MTPD and has already applied for two patents for this technology and an additional patent is under consideration.

Company is aiming to process 20% of the Indian cottonseed production by 2015.

According to commodityonline.com, global cottonseed output is estimated around 35 MT. India's cottonseed production is estimated to be around 1.575 MT, 35% of India’s cotton output of over 4.5 MT. Nearly 80% of the cottonseed is crushed for oil while the rest goes for feed. Hence, Abhay Cotex’s claims to process 20% of the Indian cottonseed production by 2015, comes to around 3,15,000 MT, near to double it’s current processing capacity of 1,80,000 TPA.

The size of the total domestic edible oil industry is around Rs 95,000 Cr. Demand in 2008-09 (oilseed season Nov-Oct) increased by 16.5% to 14.8 MT. The demand was met by imports, which increased by 46%t to 8.1 MT in 2008-09 (Nov-Oct), while domestic production of edible oil fell by 6.5% to 6.68 MT in 2008-09 (Nov-Oct).

Company posted a turnover of Rs.95.9 Cr in FY'11 as compared to Rs.26.2 Cr in FY'10, with a net profit of Rs.4.44 Cr in FY'11 against net loss of Rs.17 lakhs in the previous fiscal.

The only listed company in the cotton seed oil extraction is Madhusudan Industries, and has a current market cap of Rs.5 Cr. Company posted revenue of Rs.1.11 Cr in FY’11 as compared to Rs.1.52 Cr in FY’10 and Rs.12.23 Cr in FY’09. Though not a true comparison to Abhay's patent pending processes.

SEAF India Agribusiness Fund invests in agriculture related companies in India as it considers, India having the world’s second largest amount of arable land and a rapidly growing economy, the country represents a tremendous opportunity for investment in the agribusiness sector.

This is the second investment by the fund. In May, this year, it invested in Gwalior-based food ingredients company, Tropilite Foods Pvt Ltd (TFPL).

Headquartered in Washington, DC, SEAF (Small Enterprise Assistance Funds) is a global fund management group specializing in providing growth capital and business support to growth-oriented small and medium-sized enterprises (SMEs) in emerging markets. It manages private equity funds in these markets through a network of 21 offices around the world.

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