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Kohinoor Mandal

KOLKATA, April 19

AS the Government is going ahead with its plans for a total decontrolled sugar regime, the Rs 600-crore Balrampur Chini Mills Ltd is gearing up to enter the fast- growing branded sugar market.

Market sources said the company had already appointed a consultant for this purpose.

The consultant is preparing a strategic report on the branded sugar industry and is also helping the company in working out a path for its foray into this sector.

Though Balrampur Chini is the largest company in the sugar industry in terms of volume, it has so far kept away from the growing branded sugar sector.

Analysts feel that Balrampur Chini is waiting for the opportune moment.

"It appears that they have finally realised that the time has come to enter the branded sugar market. However, they will not go about it in a haphazard manner. Instead, they will prepare themselves to the extent possible and then launch their brand,'' an analyst said.

Market sources also said that though the company was yet to finalise its brand name, it had decided to launch the brand at the beginning of the next sugar year (October-November).

"In all probability, the branded sugar of Balrampur Chini Mills will be introduced in the market by the end of this calendar year,'' sources told Business Line.

Meanwhile, the sugar major has initiated the process of building up its marketing wing. In a recent print advertisement, it announced the recruitment of assistant sales managers. Sources in placement agencies said that the company was eyeing successful executives of leading FMCG companies.

On February 5, this year, the Union Cabinet decided that sugar would be totally decontrolled by October 1, 2002. As per the Government schedule, sugar futures exchanges will be ready by that time and it will also work out a new sugar cane price mechanism. Sugar industry experts said that consolidation in this sector was likely to take place, which was a natural phenomenon for a market moving from a controlled to decontrolled regime.

Only stronger players are likely to survive in the ensuing competition.

As a result, Balrampur Chini has decided to increase its capacity from 25,000 tonnes crushed per day to 40,000 tonnes crushed per day in the next three years to ensure its number one position.

Currently, its market share is only two per cent and the company hopes to increase it to three per cent in the next three years. Currently, there are about five or six players in the branded sugar market. The available brands include Dhampur, Modi, Daurala and Mawana.

Among the other players who are preparing to enter this sector are Amul and Safal Foods. While Amul is likely to market the product manufactured by the sugar co-operatives, Safal is the processed foods division of the Rs 1,000-crore Mother Dairy Foods and Vegetables Ltd.

For the nine months ended December 31, 2001, the company's net sales and net profit were Rs 401.22 crore and Rs 28.87 crore, respectively, against Rs 471.06 crore and Rs 35.07 crore in the corresponding period of the previous fiscal.

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