Bajaj Hind chalks out chemical business

The Shishir Bajaj-controlled Bajaj Hindusthan, the country's largest sugar-producing company, is planning to foray into molasses-based chemical business to diversify and secure itself from the cyclical nature of the sugar business.

"We are evaluating the business opportunities in value-added segments such as molasses-based alcohol," said Rakesh Bhartia, the company's chief executive officer.

Molasses is a byproduct from the company's sugar business. The company has a distillery capacity of 740 kilolitres per day and produced 87,516 kilolitres of industrial alcohol (including ethanol) last year.

Sugar, the company's main business, is highly cyclical in nature and the company posted losses in the last few quarters due to a downturn in the sugar sector.

To diversify into valued-added segments, the company recently invested Rs 240 crore to set up two medium density fibre board (MDF) plants and a particle board unit based on bagasse, a byproduct from its sugar mills.

The MDF board unit has a capacity of 80,000 cubic metres each while the particleboard has a capacity of 50,000 cubic metres.

"All the three units have commenced operations and are likely to run at their full capacity within six months. In the next financial year, we expect around Rs 400 crore revenues from these units," Bhartia added.

Jubilant Organosys and India Glycols are the two leading companies which produce a wide range of chemicals from molasses or alcohol.