United Spirits Ltd has acquired 41.54% stake in Karnataka-based Sovereign Distilleries for an Rs 3.5 crore. Sovereign Distilleries produces extra neutral alcohol (ENA), a key raw material for spirits, using both molasses and grain and has a capacity to produce 180 kilo litres of alcohol per day (KLPD).
With this investment, the USL has attained 35% self sufficiency in its projected total liquid requirement. The company is targeting a 50% self reliance in ENA by 2013.
The firm had outlined an aggressive investment strategy to up its supply side security last year with a capex of Rs 1,100 crore that included acquisitions and upgradation of its own units. Under this strategy, the company has already acquired an additional 200 KLPD of ENA capacity through its acquisitions of AP-based Tern Distilleries, Maharashtra-based Pioneer Distilleries and Sovereign Distilleries. Maharashtra, Andhra Pradesh and Karnataka contribute 35% of the total volumes of USL's sales.crackcrack
