In order to tide over the ongoing crisis faced by the company due to the rising costs of sugar and to arrest the fall in bottomlines, EID Parry (India) Ltd, a part of the Murugappa group, has decided to set up cogeneration power and distillery plants across Tamil Nadu. The company is also setting up a ethanol plant in Nellikuppam district, said A Vellayan, vice-chairman, Murugappa group.
?We have identified areas such as power cogeneration, distillery and ethanol plants to arrest the company?s mounting losses,? Vellayan said. The company will be spending close to Rs 300 crore, to expand its cogeneration capacity, to set up two new distillery units and an ethanol plant in Nellikuppam district to tap the demand of oil companies , he added.
?The cogeneration capacity will be increased to 100 mw as against 25 mw currently, in a year?s time. Similarly, the existing distillery capacity will be increased to 70 KLPD (kilo litre per day) as against 40 KLPD,? he said. ?We will be also setting two more distillery units at Pudukottai and Sivaganga with a capacity of 60 KLPD each. All this will be completed in a year?s time,? he said.
?The sugar industry in Tamil Nadu has been taken for granted. There is hardly any initiative from the state government to safeguard the interests of the industry, while states such as Uttar Pradesh and Maharashtra have announced packages for the sugar sector. If the same situation continues, the industry in Tamil Nadu will be permanently affected,? he said.
Due to declining domestic and international sugar prices, appreciation of the rupee and high inventory carrying costs, the company has incurred a net loss of over Rs 20 crore in the quarter ended September 30. ?The selling price of sugar is much lower than that of the production cost,? he pointed out.
Meanwhile, work on the Kakinada refinery (SEZ) has begun. ?Land filling has been started in the Rs 3500crore refinery project and is expected to commence functioning from September 2008,? he said.