Deccan Sugars to piggyback on modernisation to buoy profits

Riding on cost-cutting measures, a modernisation programme and a couple of farmer and worker-friendly initiatives, Samalkot-based Deccan Sugars Limited expects to best last year's profit numbers.

The company, part of the Rs 500-crore Nava Bharat Ferro Alloys group of companies, had posted a net profit of Rs 55 crore last fiscal. Deccan Sugars expects its Rs 30-crore modernisation programme and initiatives such as farmers and workers' education and research and development, help report better bottomline numbers this fiscal.

Speaking to Business Standard, N Prabhakara Rao, general manager of Deccan Sugars, said: "The state-administered cane price, excessive production and the cut-throat competition posed by too many players in the field, and the toughest challenge of facing the dreaded pest "�"� Woolly Aphid, are some of the challenges that we successfully tackled to lead the company onto the path of progress and profits."

"The average yield of sugarcane in East Godavari district is 28 tonnes per acre while it is 40 tonnes per acre in Krishna district. This is due to variations in the quality of soil in East Godavari and Krishna. The company management brought about a sea change in external and internal factors which resulted in losses both to the farmers and the company," Rao said.

"Within the company, old technology was replaced with state-of-the-art technology including all the crucial machinery that had a bearing on poor production turnout. We have also taken up education programmes for the workers on a large scale to create awareness on the upgradation and the changing technology. We have also taken up programmes for the farmers to inculcate the steps to be taken for soil enrichment, increased yield and adoption of latest techniques, all with just Rs 30 crore investment for the modernisation plan," he said.

Prior to the modernisation of the plant's machinery, the company's cane-crushing capacity was only 2,500 tonnes per day.

After the initiatives, the cane crushing increased to 3,200 metric tonnes per day. Last fiscal, the company's recovery was 10.9 per cent and the production was 3.77 lakh quintals of sugar while the amount of cane crushed was 3.5 lakh tonnes. The sugarcane-crushing season is from November to April.

As per the government directive, the farmers are paid for their sugarcane within 15 days of supply. In the current sugarcane season, the company hopes to crush 4.5 lakh tonnes, and produce five lakh tonnes of sugar. The recovery rate is expected to cross 11 per cent. At present, the farmers are being paid Rs 1,000 per tonne of cane.

"The company also owns a 60-acre sugarcane farm for research and development and to pass on the farming techniques to the farmers. It also has an enriched bio-compost yard that supplies the same to the farmers on a no-profit basis," Rao said.

He said that company is encouraging the farmers to use natural manure instead of chemicals for soil enrichment.

"The farmers are being educated on ratoon management, which is nothing but protection of ratoon (a shoot of a perennial plant such as sugarcane) after the sugarcane is cut. The ratoon is protected by covering it with trash to facilitate re-shooting of cane plants. Due to the soil enrichment measures, the farmers whose yield was only 28 tonnes per acre has now recorded 40 tonnes per acre," he said.

"The mill's fine and international class sugar is being exported to Kolkata. We are also planning to export our sugar to the Southeast countries including Thailand, Sri Lanka and Bangladesh soon," he said.