Date:01/09/2005 URL: http://www.thehindubusinessline.com/2005/09/01/stories/2005090102540200.htm

Back K.C.P. Sugar plans to set up cogeneration facilities — To invest Rs 8 crore in biopesticide plant

Our Bureau

Chennai , Aug. 31

K.C.P. Sugar and Industries Corporation Ltd plans to set up cogeneration facilities at both its sugar mills in Andhra Pradesh and diversify into neem-based biopesticides.

According to Ms V. Kiran Rao, Executive Director, K.C.P. Sugar, the company plans to invest Rs 8 crore in the biopesticide plant, a neem extraction unit. The unit will produce about 10 tonnes of neem-based products a day. The unit is expected to start production in the current year.

Ms Rao was speaking to Business Line following the company's annual general meeting here today. The company has a significant presence in biofertiliser production and is "expanding the bouquet of products available to the farmer," she said.

The Executive Chairman, Ms Rajeswary Ramakrishnan, said that KCP Sugar is also investing over Rs 35 crore in setting up a 50 kilolitres a day distillery-cum-ethanol plant and a 5 MW incidental cogeneration unit at its sugar mill in Vuyyuru and a 1.2 MW facility at Lakshmipuram. The funding is from internal resources and term loans. The new facilities would go operational during the current financial year.

Addressing shareholders at the annual general meeting, Ms Ramakrishnan said that the company reached its highest ever sugar recovery, more than 11 per cent, during the year.

She was optimistic on the company's performance during the coming season when it expects to crush about 13 lakh tonnes of sugarcane at the Vuyyuru mill against 10 lakh tonnes in 2004-05 and 5 lakh tonnes at the Lakshmipuram mill against 3.72 lakh tonnes in 2004-05.

The prospects for the sugar industry were bright in the coming two years. Sugar prices were bound to be buoyant particularly with major producers like Brazil diverting sugarcane for ethanol production. Also, the floods in Maharashtra are likely to hit the output in 2005-06.

But the issue of sugarcane price, which continues to be a political decision, strikes a sombre note. The Supreme Court has said that the State Governments have the authority to fix State Advised Price for sugarcane, and State Governments take a populist view on sugarcane pricing issue, she said.