According to Godrej Foods managing director NR Dixit, "Even after taking into consideration an inevitable delay in implementing the directive to make packaging mandatory for edible oils, we expect at least 10 per cent of the loose oil consumers start using branded products."

Dixit said this will result in a 100 per cent growth in the branded and packaged refined oils market in one year. Marico Industries Ltd chief executive officer (health care) Pranab Datta concurred that the branded segment is likely to post a near 100 per cent growth with an estimated conversion of 10 per cent of the population.

At present, the branded segment forms roughly 10 per cent of the total edible oils market. The total volume of branded edible oils is close to 1.77 lakh tonnes per annum. Thecountry's loose oils market forms 90 per cent of the total Rs 3,500-crore market. The branded segment's total size is thus around Rs 350 crore.

A 100 per cent growth would mean that the total size of the branded segment in terms of value would touch Rs 700 crore within a year, which is exponential.

After having faced rough weather last year with various issues like forex fluctuations and imports being put under the open general licence (OGL), posing as major hurdles in path of profitability for most branded players, the packaged and branded edible oils market is in for good growth prospects.

A glut in the edible oils market in the previous year had put tremendous pressure on the margins of branded manufacturers of edible oils. Further, escalating prices in the branded segment had hit the roof and the price differential between the branded and loose oil product widened to around Rs 15 to Rs 20 per litre.

Major players in the branded and packaged edible oils market are ITC, Marico Industries with brandslike Sweekar and Saffola, Hindustan Lever with Flora and Godrej Foods with Godrej Sunflower and the latest launch--Cooklite.

Dixit said the spurt in demand for branded oils is not a short-term correction and the segment is expected to grow with more awareness being created which will accentuate conversion.

The conversion will be largely on account of the `fear' factor, feel analysts. This will play a major role in shifting consumers to branded packs. The conversion rate from loose oils to branded has otherwise been as low as 5 per cent per annum. The branded and packaged refined oils industry was actually heading for a flat-to-negative growth in 1998-99, before the dropsy attack.