Our Bureau

Chennai , June 29

EMPEE Sugars & Chemicals Ltd plans to ride on the buoyancy in the sugar industry to expand its operations.

Remunerative sugar prices over the last two years have helped the company pay off its debts, report a profit in 2004-05 and plan for growth. With the sugar prices are expected to hold in the coming year or two there is reason for optimism and to plan for growth, feel company officials.

Mr R. Chandramohan, Senior Vice-President, the Empee Group, said that Empee Sugars, which has a sugar mill in Nellore district in Andhra Pradesh, plans to invest over Rs 100 crore in a 20-MW co-generation plant and double its distillery capacity to 60 kilolitres per day. The co-generation unit would start generating power in 2005-06 and distillery expansion would be completed in the current financial year.

The company will be debt free in the current year so it can exploit its asset base to raise funds to expand its operation. In the next few years, it will invest Rs 100 crore more to expand its sugar mill. By 2009-10, Empee Sugars will increase its sugarcane milling capacity to crush 7,500 tonnes sugarcane per day from 2,800 tonnes now.

The company, which has accumulated losses of about Rs 9.5 crore, has paid off its debts through a one-time settlement. It has paid Rs 19.35 crore to IDBI and Rs 6 crore to ICICI from internal accruals and promoter's contribution of Rs 13 crore. It will pay IFCI Rs 5 crore in the next couple of months, when Empee Sugars will be a debt-free company, Mr Chandramohan said.

It will fund its co-generation and distillery expansions through internal generations and bank loans. The company may come out with an equity issue to fund its sugar mill, he said.

The company has reported a net profit of Rs 2.05 crore on a turnover of Rs 62.08 crore in 2004-05.

Apart from sugar and alcohol, the group is a diversified one with interests in hotel industry, textiles, power and agro-exports.

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