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Simbhaoli plans setting up Rs 180-cr sugar refinery

29 Jan 2010 Evaluate

Simbhaoli Sugars (SSL) plans to set up a greenfield sugar refinery at Kandla in Gujarat with a capacity of refine 1,000 tonnes of raw sugar a day. The Rs 180-crore project will be executed by a new special purpose vehicle that would be financed by SSL, the promoters, and long-term debt. The plant is expected to be commissioned in next 14 months and produce about 3 lakh tonnes of white sugar a year, adding about Rs 750 crore to the company's topline. Simbhaoli Sugars has acquired 41 acres and intends to add more nine acres before the plant goes on stream. The overall refining capacity of the company will increase to 3,000 tonnes a day once the plant becomes operational.

 

Insufficient rains had an adverse impact on sugarcane availability supplemented by rising demand leading to a structural deficit of 5-7 million tonnes, forcing many sugar companies to import raw sugar. SSL has technical capabilities to refine raw sugar at a cost of below $65 a tonne.

 

Meanwhile it has reported highest-ever net profit of Rs 44 crore in the quarter ended December 31 against a net loss of Rs 12 crore in the same period a year ago on the back improved production and higher realisation. Sales nearly doubled to Rs 376 crore (Rs 195 crore). Realisation jumped to Rs 32,800 a tonne in the quarter against Rs 27,000 in the quarter ended September. It was Rs 17,500 in December 2008.

 

Its production increased 34,300 tonnes to 108,692 tonnes in the December quarter. It has repaid Rs 20 crore of debt. It expects to refine 3.60 lakh tonnes of raw sugar and produce 1.60 lakh tonne of sugar through sugarcane crushing.

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