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Suresh Iyengar

In talks with 3 cos in UP, one in Maharashtra

Recently in Bijnor (Uttar Pradesh) , Dec. 24

Dwarikesh Sugar Industries Ltd, which is in the midst of a Rs 350-crore expansion exercise, intends to augment its capacity through the inorganic route as well. It is looking to acquire a "large company", either in Maharashtra or Uttar Pradesh, said Mr G.R. Morarka, Chairman of Dwarikesh Sugar Industries (DSIL).

"We are in talks with three companies in UP, and with one in Maharashtra," he said. "We are also exploring opportunities in the south as the recovery (from sugarcane) in this region is the highest in India, next to that of Maharashtra," he added. The acquisition will be completed by September 2007, he pointed out.

DSIL is setting up a greenfield sugar plant of 7,500 tonnes crushed per day (tcd) expandable up to 10,000 tcd in Dwarikesh Dham, in Bareilly at a cost of Rs 150 crore. It is also coming up with a 36-MW cogeneration power plant in Dwarikesh Dham at an investment of Rs 100 crore.

Co-generation plant

An additional co-generation plant of 24 MW in Dwarikesh Puram will be set up at a cost of Rs 100 crore. Post-expansion, the company expects its production capacity to touch 21,500 tcd by FY 2008, from 14,000 tcd currently.

Its revenues will touch Rs 600 crore while its net profit has been projected at Rs 100 crore, said Mr Morarka. The company's revenues from its sugar business during 2005-06 amounted to Rs 234.66 crore while its power generation revenues stood at Rs 217.8 crore.

DSIL stands to gain Rs 17 crore through tax breaks from the UP Government's decision to extend tax benefits for new projects up to March 2008. The company is expecting revenue of Rs 10 crore through carbon credits. Post expansion, the company will sell 2 lakh tonnes of carbon credit every year, said Mr Morarka.

"We have received in-principle approval from the UP Government for undertaking research in sugar cultivation. The company has applied for 1,000 acres of land but could start its research with even 500," said Mr Morarka. "The land acquisition will be completed in three-four months. The research will be UP-centric and will help farmers better their yields," he added.

To take advantage of the Government's ethanol blending programme, the company is setting up a new distillery unit at a cost of Rs 37 crore in Dwarikesh Dham and raising the existing capacity at Dwarikesh Nagar at a cost of Rs 37 crore. These will be completed by 2007.

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