The Hindu Business Line : Simbhaoli plans setting up Rs 180-cr sugar refinery

Expanding sweetness: Dr. G.S.C. Rao (right), Chief Executive Officer, Simbhaoli Sugars, with Mr Sanjay Tapriya, Director, Finance, at a press conference held in Mumbai on Thursday. -

Our Bureau

Mumbai, Jan. 28

Simbhaoli Sugars (SSL) plans to set up a greenfield sugar refinery at Kandla in Gujarat with a capacity of refine 1,000 tonnes of raw sugar a day.

The Rs 180-crore project will be executed by a new special purpose vehicle that would be financed by SSL, the promoters, and long-term debt.

Land acquisition

Dr G.S.C. Rao, Chief Executive Officer, said the plant is expected to be commissioned in next 14 months and produce about 3 lakh tonnes of white sugar a year, adding about Rs 750 crore to the company's topline.

Simbhaoli Sugars has acquired 41 acres and intends to add more nine acres before the plant goes on stream.

The overall refining capacity of the company will increase to 3,000 tonnes a day once the plant becomes operational.

Insufficient rains had an adverse impact on sugarcane availability supplemented by rising demand leading to a structural deficit of 5-7 million tonnes, forcing many sugar companies to import raw sugar.

Globally, sugar production was at the lowest at the beginning of 2009-10.

SSL has technical capabilities to refine raw sugar at a cost of below $65 a tonne.

The company has two full-fledged sugar manufacturing plants in Uttar Pradesh. The refinery will be built with in-house technical support from Integrated Casetech Consultants.

NET PROFIT ZOOMS

SSL has recorded its highest-ever net profit of Rs 44 crore in the quarter ended December 31against a net loss of Rs 12 crore in the same period a year ago on the back improved production and higher realisation. Sales nearly doubled to Rs 376 crore (Rs 195 crore).

Realisation jumped to Rs 32,800 a tonne in the quarter against Rs 27,000 in the quarter ended September.

It was Rs 17,500 in December 2008.

SSL's production increased 34,300 tonnes to 108,692 tonnes in the December quarter. The company has repaid Rs 20 crore of debt. It expects to refine 3.60 lakh tonnes of raw sugar and produce 1.60 lakh tonne of sugar through sugarcane crushing.

The company shares on BSE were up four per cent at Rs 82 on Thursday.