Sakthi Sugars may shelve Sakthi Beverages

Faced with hurdles in getting clearance from the state government for the operations of its beverage plant, Sakthi Sugars may shelve Sakthi Beverages Limited.

The company decided to diversify into the beverages segment four years ago. It had set up a plant in Sivaganga district with a bottling capacity of 600 units per minute at an investment of Rs 20 crore.

The production from the unit was meant exclusively for domestic consumption, according to M Manickam, vice-president and managing director, Sakthi Sugars.

The sugar major had entered into a contract with Coca-Cola to prepare and package some of its products using 75,000 litres groundwater a day.

The company agreed to put in place an effluent treatment system at the packaging unit, like the one it has at its sugar mill, but was yet to get the approval from the state government for the plant, he added.

"There is an uncertainty regarding the beginning of operations at the plant. Hence, the company may decide to shelve the beverage division," sources told Business Standard.

The company has another beverage unit near Chennai, with an installed capacity of 51 million tetra packs per year, where it produces fruit drinks like Frooti, Appy and Pingo.

The plant, which is into the manufacturing of fruit-based beverages, plans to export fruit juices and pulp, packed in metal cans and other aseptic containers.