Sugar majors plan Rs 1000 cr capex in Bihar

The sugar industry majors in the country have lined up investments worth over Rs 1,000 crore in Bihar.

The potential investors include Bajaj Hindusthan, the K K Birla group's The Oudh Sugar Mills and Upper Ganges Ltd, Rajshree Sugar Mills and Dhampur Sugars.

Installation of new integrated units and expansion of capacity at some of the existing ones are in the pipeline.

The investments, which are waiting formal announcements from the companies, will be the first to be notched up by the new National Democratic Alliance government. The Central government has created a sort of 'thumbs up' mood by offering tax incentives to industry.

"The subsidy on sugar in Bihar works out to be Rs 1.50 per kg," said C S Nupany, managing director of The Oudh Sugar Mills and president of Indian Sugar Mills Association.

"We will invest Rs 150 crore in expanding capacity at two existing units by 3,500 tonne crushed a day (TCD)," he added.

After this, the group's total capacity from three units in Bihar will rise to 15,000 TCD in 24 months.

Bajaj Hindusthan, which leads the industry with 5.6 per cent share of the market, is also eyeing a unit in the state, preferably in Gopalganj or West Champaran area. "It is too early. We will reach a decision in two-three weeks," said an executive of the company.

Dhampur Sugars too has planned a unit or two in Bihar. "We have sent a team to the state to assess the ground situation and take a decision by the end of this week. We are not looking at a unit below 3,000 TCD," said Gaurav Goel, joint managing director.

Rajshree Sugar Mills is said to be considering a unit in Chakia. Sources say its will be in the 3,000-5,000 TCD range.

At present, Bihar has ten operational units with a capacity of 37,500 TCD compared with 28 units in the 1980s with capacity of 34,123 TCD.

Despite this, the state now contributes merely 4 per cent to the total national sugar output, compared with 30 per cent in the 1980s, as most of the capacity is idle.