Date:23/06/2006 URL: http://www.thehindubusinessline.com/2006/06/23/stories/2006062301100300.htm

Back Sakthi Sugars goes for expansion

L.N. Revathy

Project to be commissioned by September 2007

Fact file
Once complete, the sugar major will have a total installed sugar crushing capacity of 18,500 tonnes per day.
The company's targeted investment on the co-generation plant has been estimated at Rs 310 crore.

MR M. MANICKAM

Coimbatore , June 22

Sakthi Sugars has, with the funds raised through the foreign currency convertible bonds (FCCB) issue last month, commenced work on its expansion plans expected to be commissioned by September 2007.

Once complete, the sugar major will have a total installed sugar crushing capacity of 18,500 tonnes per day (tcd). The company plans to enhance the capacity of the plant in Sakthinagar to 9,000 tcd and is in the process of setting up a 3,500 tcd greenfield project in Tamil Nadu. It also has a unit in Sivaganga, Tamil Nadu.

Apart from enhancing its crushing capacity, the company's targeted investment on the co-generation plant has been estimated at Rs 310 crore. At its Sakthinagar unit, the company plans to increase the co-generation capacity from the existing 35 MW to 60 MW, while at Sivaganga, it is expected to go up to 35 MW from 5 MW at present.

The power generating capacity at the proposed greenfield project site is expected to be of the order of 25 MW. "Except for the Sakthinagar co-generation plant, everything else would be commissioned by June 2007," Mr M. Manickam, Vice-Chairman and Managing Director, Sakthi Sugars, told Business Line.

The Sakthinagar co-generation plant will be commissioned by September 2007, he added.

To a query on the retail rate of sugar in the domestic market, he said it would remain at the Rs 18 - 20 per kg level. "A lower rate may not be viable. We have to settle the cane growers dues."

According to him, the domestic sugar scenario would remain firm in the near term.

Auto components

Mr Manickam said the company intended to spend about Rs 75 crore on its subsidiary - Sakthi Auto Components Ltd (SACL) , engaged in the production of safety critical items for the automotive sector.

"We will infuse funds for strengthening our machining lines for export and for capacity expansion as well."

SACL had, only recently acquired 51.83 per cent stake in the Coimbatore-based Bonomi Belgium Ventiel India, a company engaged in the manufacture of industrial valves.

"This acquisition is set to add another 1,000 tonnes a month to SACL's existing capacity taking the total to 3,000 tonnes per month.

"We are planning to enhance this further by another 1,800 tonnes/month with the infusion of additional funds. We are targeting a capacity 6,000 tonnes/month in a span of 18 months," Mr Manickam said.