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Dhampur Sugar Mills on recovery path

Girish Singhal

NEW DELHI, April 22

AFTER witnessing two bad years for the sugar industry which led to a huge net loss of Rs. 43 crores in fiscal 1998-99, The Dhampur Sugar Mills Ltd (DSM) is slowly getting back on the recovery path in the current fiscal ending September 30.

This is mainly on account of a substantial improvement in cane crushing registered by the company in its three sugar units situated at Dhampur, Rouzagaon and Asmoli, better recovery rate and enhanced capacity utilisation in the current sugar season.

DSM has crushed around 240 lakh quintals of cane while working at 70 per cent capacity utilisation in the 1999-2000 season. It had crushed 203 lakh quintals of cane in the previous season and 194 lakh quintals in the season before that. The recovery rate in the current season stood at 9.35 per cent (9.1 per cent).

The company had utilised 60 per cent of its installed cane crushing capacity in the season 1998-99. ``It plans to achieve a capacity utilisation of 85 per cent in the next season which will begin in October 2000,'' Mr. Gaurav Goel, Director, DSM, told Bu siness Line.

``The company also expects to realise better margins in the domestic market on account of a recently announced hike in custom duty from 30 per cent to 60 per cent on imported sugar. But the benefits on this account will be reflected only in the next year 's balance sheet as the country has huge quantity of buffer stock available with it,'' Mr. Goel said.

This apart, DSM expects firming up of sugar prices in the world markets which are presently at their 13-year low levels. The current international prices are around $180 per tonne as against $350 per tonne three years back. ``A recovery in the internatio nal prices of sugar will allow its domestic producers to export more and get better margins in the coming years,'' Mr. Goel said.

To meet the finance requirements for various ongoing activities in DSM, the company is planning to issue preferential shares to financial institutions. A resolution to this effect has already been passed by the company's general body at its recently conc luded annual general meeting (AGM).

The company is in the process of launching double refined sulphur-free sugar under the brand name ``Dhapure.''

``This will not only increase the price realisation of the sugar being produced by the company but also establish its brand image in the world markets,'' Mr. Goel said.