UP plans privatization, sell-off in 33 sugar mills

Font Size

Print

Feedback

Email

Discuss

Related Articles

Wheat acreage up 5 pc to 137.02 LHGold nosedives Rs 320 per 10 gramSugar remains quiet on some supportBasmati paddy prices jump 20-25% in Punjab, Haryan...

Mumbai: Uttar Pradesh, India's second largest sugar producer, is planning to privatise or completely sell-off 33 state-owned sugar mills in an effort to reduce the burden of the loss-making units, a top official said.

"The process of disinvestment should be over before this year end," V.P. Dube, managing director of UP State Sugar Cooperation Ltd, said in an interview on Wednesday. All the 33 mills are owned by the corporation.

The previous attempt to sell-off the state-owned mills in 2008 was unsuccessful as the bids received were lower than the reserve price, Dube said.

The government has undertaken financial restructuring of the mills to help reduce the accumulated losses, Dube said.

The losses by the end of 2007/08 was about 20 billion rupees, but it has fallen after the state government decided to convert loans into equity and waive off interest part, Dube said.

"The conversion of loans into equity and removal of interest portion will help in reducing losses by about 5-6 billion rupees," Dube said.

The corporation is in the process of appointing an advisory firm, which will suggest the route to be taken for disinvestment of the mills. Nineteen of the 33 mills are shut, Dube said.

Once the sale or privatisation process is completed the new owners would also get the reserve area or the cane growing area surrounding the mills, Dube said.

The state produced an estimated 7.3 million tonnes of the sweetener in the year ended September 2008, mostly by the private mills, compared with about 9.1 million tonnes produced in western state of Maharashtra, the top producer.

Some of the large private mills with presence in the state include Bajaj Hindustan, Balrampur Chini, and Triveni Engineering.

In the year ending September 2009, the corporation has so far produced only about 90,000 tonnes of sugar and total production is likely to be less than 300,000 tonnes.

"The overall output is seen lower as crushing this year will be short due to lower cane availability," Dube said.