Sugar majors may defer Bihar plans

Sugar majors may put their Bihar plans on hold owing to bleak outlook in the sector.

The fall in domestic sugar prices to Rs 1,650 per quintal from Rs 1,850 a quintal last year, coupled with the worldwide glut, has led the companies to delay their plans by almost a year.

Dhampur Sugar, which was planning to set up a Rs 185 crore plant of 3500 tonne crushed daily (tcd) capacity atMadhepura , has postponed the plan till 2008. The plant, equipped with power generation and distillery facility, was expected to go on stream by October 2007.

“The project is still on. But we have deferred the investment plans. The unit is likely to become operational only from 2008”, said Gaurav Goel, joint managing director, Dhampur Sugar.

Rajshree Sugars and Chemicals (RSCL) had announced setting up of two 5000 tcd integrated sugar complexes in Bihar at an investment of Rs 500 crore.

The sites identified were East Champaran and Madhubani. The mills were also supposed to have distillery and cogeneration facilities.

“The sugar mills are likely to become operational only in the sugar year 2008-09 (October-September)”, said Rajshree Pathy, chairman and managing director, RSCL

The ultimate gainer will be K K Birla’s Oudh Sugar Mills and Upper Ganges Sugar Mills which have increased their capacity in Bihar from 10,700 to 11,700 tcd this season. The capacity would rise to 14,200 tcd in the 2007-08 season and to 17,500 tcd in 2008-09.

This would include the expansion at Sidhwalia unit from 2500 to 5000 tcd (2007-08) and at Hasanpur unit from 1700 to 5000 tcd in 2008-09, according to C S Nopany, chairman and managing director of Oudh Sugar Mills.

With all these additions, the company would continue to remain the biggest sugar player in Bihar.

Bihar had received investment proposals from various sugar companies such as India Glycols, Kamlapur Sugar and Industries, Ganesh Sugar Mills, etc after the Nitish Kumar government came up with an investment policy that offered fiscal incentives to companies investing Rs 250 crore and above.

The proposals are considered to be an important achievement of the Nitish Kumar government.