Even after the Central directive, which allowed ethanol factories only to sugar manufacturing industries, has set the investment plans in Bihar off the track, Kolkata-based Ruia Group is open to the idea of running the closed sugar mills in Bihar.
The group, better known for its acquisition of heavy engineering major Jessop and tyremaker Dunlop, is now expanding its presence in sugar with a Rs 800-crore integrated complex at Shariyatpur in Motihari district.
Earlier, Reliance Industries and state-run oil firm HPCL had submitted bids for reviving sugar mills in the state. Bharti Enterprises? Fieldfresh and Indian Oil have also shown interest in leasing closed sugar mills in the state.
Centre?s directive last month has prevented Bihar from taking up proposals from juice-to-ethanol projects. According to sources it had led the state to lose a few major investment proposals.
Pawan Ruia, chairman of Ruia group, which also controls Kamlapur Sugar in adjacent Uttar Pradesh, told FE, ?We are open to ideas. Once we are in the region, we will certainly be open to any suggestions.?
Of the 32 sugar factories in Bihar, only seven or eight are running now. Union minister for food & agriculture, Sharad Pawar urged the government as well as the private sector to restart the closed sugar mills in the state.
According to Ruia, the Centre is trying to strike a balance between ethanol and sugar production, as juice-to-ethanol projects might end up in lowering the sugar production in the country.
He said that it made more sense to have a sugar unit in Bihar than in UP, since the Bihar government has set a lower price for sugarcane procurement from farmers.
?There are certain advantages in Bihar like raw material, labour and land availability. Moreover, the state advisory price in Bihar is in the range of Rs 92 to Rs 95, while it is almost Rs 125 in UP,? he said.
The group?s proposed integrated complex in east Champaran, in Bihar, will be on stream by 2009 with an eye on the October 2009-September 2010 season.
The group has planned to invest Rs 800 crore by 2009, with Rs 520 crore coming as loans, Rs 120 crore from the central government?s sugar development fund and the rest from the group.
The complex will have a unit that can crush 10,000 tonne of sugarcane to produce 1,000 tonne of sugar, and an ethanol-manufacturing unit with a capacity of 240 kilolitre (kl). It will also generate 50mw from ethanol and the left over or secondary juice.
Ruia?s present facility at Kamlapur in UP can produce 4,000 tonne sugar per day. ?We will have a capacity of 14,000 tonne per day of sugar after the new facility comes up,? Ruia said.
?We can go up to producing 720 kl per day of ethanol at our plant in Motihari. But we are not putting up that big a plant now, as it would be more cost prohibitive,? he said. It has kept provision for going up to 1,000 kl per day of ethanol production.
