Dhampur Sugar eyes 2 mills in Maharashtra

Dhampur Sugar Mills (DSM), a Rs 1000-crore group, is in talks with the Maharashtra government to acquire two sugar mills in the state by the end of December 2006.

Talking to Business Standard, Arhant Jain, vice-president (finance), DSM, said, "We are in talks with the cane commissioner office of the state government which regulates sugar mills in Maharashtra. These sugar mills fall under direct regulations of co-operative laws."

DSM is interested in acquiring sugar mills with cane crushing capacity between 3,000 tcd (tonne crushing a day) and 6,000 tcd.

The company has carried out an extensive and detailed study on the viability of sugar mill acquisitions in the state before approaching the Maharashtra government.

"The study reports are positive and, as per them, the acquisitions are feasible on the financial and technical fronts," Jain said.

The company is of the opinion that it would be able to derive advantages like higher sugar cane supplies at the local level owing to the state's possession of large agricultural land under sugarcane cultivation.

"The sugar recovery rate of canes from Maharashtra is 12-13 per cent, whereas that in Uttar Pradesh is just 10 per cent," he said, while emphasising the superior quality of Maharashtra's sugarcanes.

Although the financial details are yet to be finalised, the company wants to take over the two sugar mills on a lease basis or through purchase depending on the government's final decision.

"There are certain terms and conditions of the Maharashtra government, which we need to look into it," Jain added.