Simbhaoli Sugars today announced a joint venture with UK-based trading firm ED & F Man Holdings (EDFM) to set up a sugar refinery in Gujarat at an investment of Rs 228 crore.
Simbhaoli Sugars Ltd (SSL) will have 57.5 per cent stake in the joint venture company Uniworld Sugars Ltd (USL), while EDFM will have the remaining share of 42.5 per cent.
The green field sugar refinery would be set up at Kandla, West Coast, Gujarat with a capacity of 1,000 tonnes per day.
"SSL, along with its promoters and EDFM have agreed to enter into a joint venture by contributing in the share capital of USL in the ratio of 57.5:42.5 for setting up port based refinery of raw sugar in India," the company said in a statement.
The joint venture company would sell the white sugar in the domestic market as well as outside India.
"The estimated cost of the project is Rs 228 crore, which is proposed to be financed by way of long-term loans and promoters equity," the statement said.
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Simbhaoli, with three sugar mills in Uttar Pradesh, has a capacity to produce 3 lakh tonnes of sugar from sugarcane and refining capacity of 4 lakh tonnes. The London-based EDFM is one of the leading providers of sugar, molasses, animal feed, tropical oils, biofuels, coffee and financial services.
"The joint venture shall bring in the expertise of both operational management and international marketing. The refinery is intended to be commenced in the current sugar cycle itself to reap maximum benefits from changing business cycle," Simbhaoli Chairman and Managing Director Gurmit Singh Mann said.
Simbhoali CFO and Director Finance Sanjay Tapriya said that the joint venture has been approved by the Board of Directors of both the companies and is expected to close in February.
"After achieving the financial closure, the project will be implemented in 16-18 months. With the addition of port-based refinery, the company will be able to integrate into global raw refining markets," Tapriya added.