Dharani Sugars to scale up capacity to 10,000 tcd

CHENNAI: Chennai-based Dharani Sugars & Chemicals ( DSCL) part of PGP group is bullish on expanding its 20 year old sugar business. It plans to advance the commissioning of its third plant in Tamil Nadu by two months in view of the prevailing shortage in the market.

NRI industrialist and DSCL executive chairman, Dr Palani G Periaswamy told reporters after the company���s 22nd AGM in Chennai on Monday, it is setting up an integrated sugar complex at Kalayanallur village, Sankarapuram in Villupuram district at a cost of Rs 333 crore. It has been funded with loans from banks and Rs 90 crore raised by way of preferential issue to promoters and internal accruals.

The complex will have a sugar plant with a daily crushing capacity of 3500 tonnes ( TCD) expandable to 5000 TCD, a 22 mw co gen power plant( Rs 150 crore cost) plus an industrial distillery of 100 kl per day. The plants are slated to commence production next month ahead of the earlier schedule of December 2009, he said.

DSCL has now two sugar plants at Vasudavanallur in Thirunelveli and at Karaipoondi village in Polar Taluk in Thiruvannamalai district. Once the third plant is commissioned, total capacity will touch 10,000 tcd with a scope to expand it to 12,500 tcd. The co-gen capacity will increase to 40 mw and the distillery to 160 kl.

He noted while the company has had ups and downs, it had overcome the difficult periods with the co operation of farmers, employees and management. It had sustained activities without raising additional capital from shareholders.
During the year ended March 31, 2009, DSCL reported a net profit of Rs 10 crore against a loss of Rs 7.87 crore in the previous year. Its turnover improved to Rs 232.83 crore ( Rs 206.93 crore). In the first quarter, it reported a net profit of Rs 9.78 crore on a turnover of Rs 93.39 crore. It is expected to maintain the results based on the current market conditions.

Asked about more private sector mills coming up in the State, Dr Periasamy said, " We have a strong relationship with growers. We have been helping them to grow special hybrid cane varieties and providing special assistance for drip irrigation to conserve water. To tide over the shortage in farm labour, we will shortly purchase harvesters at a cost of Rs 10 crore".

The chairman said the Government should come out with a vision document to support the growth of the sugar industry which has a turnover of Rs 40,000 to Rs 50,000 crore a year and employing six lakh people directly and 4.5 crore farmers involved in cultivation and related activities. There are nearly 600 mills in the country with Rs 60,000 crore investment made by private, public and co operative sector.

As there is a global shortage and the import cost of raw sugar is also very high, it will be difficult for Government to directly import white sugar and supply at lower cost.

Rather, it can support the efforts of sugar mills to process the imported raw sugar and allow the market mechanism to operate. If necessary, it can subsidise the cost of sugar sold through PDS. This will help the mills to offer attractive cane price to the growers and encourage them to increase production.

Any intervention by the Government to control price will distort the market and create chaotic conditions with mills not able to offer remunerative price to farmers and pushing the industry into a crisis, he pointed out.