The Hindu Business Line : Balrampur Chini plans Rs 200-cr expansion

SUGAR major Balrampur Chini Mills Ltd has worked out a Rs 200-crore expansion programme, under which it will set up a new 7,000-tonnes-crushed-per-day (TCD) sugar plant and expand the capacity in two of its four existing mills.

With the completion of the expansion programme, the total capacity of Balrampur Chini is slated to increase to 40,000 TCD. This would make it the largest sugar producer in India, surpassing the four sugar companies of KK Birla Group, which together add up to approximately 36,000 TCD.

The new plant (a greenfield project costing Rs 150-160 crore) will be set up at Akbarpur in the eastern part of Uttar Pradesh. A senior company official said it would just be a sugar plant and the unit would not be accompanied by a brewery or a power unit.

The company is expanding the capacity of the Tulsipur unit from 6,000 TCD to 8,000 TCD and that of the Bhabnan unit to 10,000 TCD from 8,000 TCD. The cost of the expansion will be Rs 40-50 crore. The capacity of the Balrampur unit is 10,000 TCD and that of the Haidergarh unit, which is an integrated sugar complex, is 5,000 TCD.

"We are expecting to commission the new plant by the end of November this year. Expansion of the other two units is likely to be over by the middle of 2005-06," the official said. Balrampur Chini is currently in the process of acquiring 60 acres at Akbarpur for the new plant.

The project is likely to be funded through a mix of debt and internal accruals but the official said that the management was open to other options. He was, however, not forthcoming when asked whether the company would opt for the equity route.

The company last tapped the equity market in August-September, 2004, with its Rs 60-crore rights issue. It sold 22.75 lakh shares of Rs 10 face value and charged a premium of Rs 250 on every share. The issue was oversubscribed.

Meanwhile, for the quarter ended December 31, 2004, the company increased its gross turnover to Rs 299.21 crore from Rs 242.42 crore registered in the corresponding quarter of the previous fiscal. The net profit jumped to Rs 45.14 crore from Rs 10.28 crore.

For the nine-month period, Balrampur Chini's gross turnover increased to Rs 740.10 crore from Rs 672.83 crore. The net profit almost doubled to Rs 71.87 crore from Rs 36.94 crore.

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