The Hindu Business Line : Dharani Sugars on expansion mode

Looking ahead
The company is taking advantage of the buoyancy in the sugar industry and the optimistic outlook on sugar prices to expand its operations.

Chennai , March 21

Dharani Sugars and Chemicals Ltd is expanding its sugar mill capacities and distillery unit and is exploring options to set up a new sugar mill, according to its Chairman and Managing Director, Dr Palani G. Periasamy.

Dr Periasamy said the company, which had over the last two years restructured its loans, is also in negotiations for reducing its interest costs.

It is expanding its sugar mill in Polur, Thiruvannamalai, to crush 4,000 tonnes sugarcane a day from the present capacity of 2,500 tonne. The company has another unit in Tirunelveli, with a capacity of 2,500 tonnes, where it is doubling its distillery unit to 60 kilolitres a day. It has applied for the licence, he said.

Dharani Sugars is also planning to implement its licence to set up a 3,000- tonne sugar mill at Sankarapuram, Villupuram, according to Dr Periasamy.

The expansion of its Polur unit is expected to cost about Rs 30 crore which would be funded through a soft loan of Rs 18 crore from the Sugar Development Fund, bank loan of Rs 9 crore and Rs 3 crore from internal accruals. The project would be completed by November 2006 in time to commence crushing for the 2006-07season.

The new sugar mill at Villupuram will involve investments of Rs 125 crore, which will be funded through FCCB and ADR/GDR route. A 25-MW cogeneration plant will also come up at this facility, he said.

The company expects to conclude the year with a turnover of Rs 260-300 crore buoyed by its performance on sugar exports, he said.

It has imported over 1.66 lakh tonne raw sugar at an average cost of $222 a tonne and is now meeting its export obligation at prices averaging $450. It exports to Afghanistan, Bangladesh, Vietnam and Pakistan, he said.