Bajaj Hindustan chief gainer from UP sugar policy

The sugar policy announced by the state government in 2004 has put UP among the largest sugar-producing states in the country. The Bajaj Hindustan group has been the major beneficiary of the new policy.

In less than two years, the number of the sugar factories of the group has increased from two to 13.

The firm is set to emerge as the largest sugar producer in Asia and the sixth-largest in the world from the forthcoming crushing season beginning in October.

From the next season, the total daily crushing capacity of 13 sugar mills of the group in Uttar Pradesh will be 100,000 tonnes crushed per day (TCD). Besides, it produces ethanol and co-generates power.

Since the announcement of the policy in 2004, so far 28 new private mills have either commenced or are expected to begin production from the crushing season beginning in October.

According to Cane Commissioner Rahul Bhatnagar, the new policy has brought in a capital investment of Rs 3,730 crore, and Rs 1,000 crore in the capacity expansion of the existing mills and installation of plants for the production of ethanol and co-generation of power.

Sugar production in 2004-05 was 50.37 lakh tonnes, increased to 58 lakh tonnes in 2005-06, and is likely to be 74 lakh tonnes in 2006-07.

"The new policy has so far created a fresh cane-crushing capacity of 185 lakh TCD, increase in the ethanol production capacity by 265 kilolitres per day, and power generation capacity of 250 Mw,'' Bhatnagar said.

The new sugar policy added a fresh cane-crushing capacity of over 63,200 TCD. And, another crushing capacity of 1.12 lakh TCD is expected to be added in the next cane crushing season.

"For the first time in recent decades there was no agitation by the farmers regarding the payment of arrears because almost the entire dues have been cleared by the sugar mills," Bhatnagar said.

In 2004-05, the dues of the farmers were Rs 5,408 crore, which increased to Rs 6,900 crore during 2005-06, and were expected to be close to Rs 9,000 crore in 2006-07, Bhatnagar said.

He said it was due to the prompt payment by the sugar mills that farmers were sowing the cane crop and the area under sugarcane was steadily increasing.

"In 2004-05, the area under sugarcane was 20.45 lakh hectares, increased to 24 lakh hectares in 2005-06, and was expected to increase to 26 lakh hectares," he added.

The new sugar policy has facilitated the rise of Bajaj Hindustan as the largest sugar group. Prior to the new policy, the group had only two sugar refineries in Lakhimpur district.

In less than two years the group has added eleven new mills. The foundation stone and ground-breaking ceremony for the 13th mill at Basti was laid on June 7.

As soon as the new policy was implemented by the government, the Bajaj group set up four new mills, two in Muzaffarnagar, one in Meerut and other in Bijnor. The capacity of each mill is 7,000 TCD. From the next cane crushing season of 2006-07 beginning in October next, three new sugar factories, one each in Lakhimpur, Saharanpur and Pilibhit, will start.

The capacity of the Lakhimpur mills at Khambhakhera is 10,000 TCD while the capacity of other two mills is 7,500 TCD.

The Bajaj group also acquired three old sugar mills in eastern UP districts of Deoria and Basti. The mills in Basti at Walterganj and Basti were owned by the Narang group. The Pratapur mill in Deoria is over a century old, set up in 1903. Bajaj is now busy expanding the capacity of the three mills to 7,500 TCD.

The new nine private sugar mills have a total crushing capacity of 1.12 lakh TCD, and are expected to commence production from the next season in October next.

Three of these will be of the Bajaj group with a 25,000 TCD capacity, two of the DSCL group, both in Hardoi, one of the Balrampur group in Gonda, three of Treveni Engineering at Rampur, Moradabad and JP Nagar with a total capacity of 17,500 TCD.

Two new units of the Dalmia group at Sitapur and Shahjahanpur will commence production from October with a total capacity of 10,000 TCD.

The Uttam group is setting up two mills, one in Muzaffarnagar and other in Saharanpur, with capacity of 10,000 TCD. Three new mills of the Rana group, two in Rampur and one at Moradabad, with a capacity of 16,000 TCD, are to commence production from October.

One mill, each of the Simbholi group at Hapur with a 4,000 TCD capacity and one of the DSM group at Baduan of a 7,000 TCD capacity, will commence production from October next.