EID Parry to buy out Cargill stake in JV

Sanjay Vijayakumar

CHENNAI: Murugappa Group's EID Parry India Ltd said it will buyback join venture partner Cargill 49 per cent stake in Silkroad Sugar Private Limited, formed for a sugar refinery project in Andhra Pradesh, which has been delayed for over 3 years due to non-availability of feedstock gas.

In 2006, the company formed the joint venture with Cargill to set up a port-based sugar refinery in Kakinada, Andhra Pradesh, with an initial capacity of 6,00,000 tonnes a year and a plan to expand it to a million tonnes. That would habe made it the biggest of its kind in South Asia. The plant was supposed to commence operations in 2007, but was delayed due to non-availability of gas.

In announcement to BSE, EID did not disclose the terms of the deal, but said its equity stake in Silkroad Sugar Private Ltd would increase to 99% and it would become its subsidiary.

EID Parry is now installing a coal boiler, moving away from a gas base. The move will add an outlay of around Rs 100 crore, over and above the Rs 450 crore the company invested in the project.