Rs 25 crore distillery in Khasa by June 2006

Amritsar-based Khasa Distillery Company, a unit of Bhagat Industrial Corporation and one of the oldest distilleries in India, is coming up with a grain fermentation/distillation plant in Khasa (Amritsar) with a total project cost of Rs 25 crore.

Once the unit is operational, the plant will manufacture 90,000 litres per day of rectified spirit (RS), extra-neutral spirit (ENA), country liquor and Indian Made Foreign Liquor (IMFL), by installing new equipment at the existing premises.

The new unit will be spread over 3 acres and is expected to be operational in June 2006. The company also has plans for captive power generation and is likely to be operational by December 2007, with a capacity to produce 2.5 Mw of power per day.

Of this total capacity, 1 Mw unit of power would be sold to the Punjab State Electricity Board (PSEB). The existing capacity of the plant is 45,000 litres per day or 2 lakh cases of country liquor per month using molasses as raw product. The machinery for the new unit will be indigenous, except Jet Cooker, which they are going to import from the US.

Commenting upon the selection of grain as raw material over molasses, Y S Mathur, Director Works, Khasa Distillery Company said, "Grains like broken rice, wheat, corn, barley are comparatively cheaper than molasses and moreover they are readily available in Punjab. That's why we have selected grain over molasses. Also, in western countries, grain is used as raw material and it is much popular."

Presently, the company manufactures RS, ENA and Country Liquor. Mathur said unlike Italy, where 5 million cases are sold yearly, Country liquor is not popular in India. "We have a market share of 20 per cent in Punjab. We are going to tie ups with two UK firms for bottling purposes, for which the things have already been finalised. We are hopeful once the bottling started, it would boost the sales," he added.

Last year the turnover of the company was Rs 80 crore and this fiscal they are expecting a decline of Rs 10 crore in the existing turnover. Mathur said once the production of IMFL started, they were expecting a turnover of Rs. 200 crore by 2008, as there is a huge potential for IMFL in Punjab and overseas markets also.

In order to increase their presence, Mathur added that they were planning to re-enter Canteen Stores Department again, as earlier they used to supply rums under the brand name Five Star XXX Rum and would also like to explore the overseas market. The project would be partly funded by the company and the bank.