The Tamil Nadu government will re-open the Maduranthakam Co-operative Sugar Mills at Padalam, 90 km from here, on Friday. It has decided to infuse Rs 30 crore and write off about Rs 22 crore of the accumulated defaults of the mill.
Speaking to Business Standard on the sidelines of TPM national conference, organised by the Confederation of Indian Industry (CII), the state industries secretary Rajeev Ranjan said, “we are re-opening the mill on Friday and have infused around Rs 30 crore.”
In August, Tamil Nadu chief minister M Karunanidhi said that the government has written off about Rs 22 crore, the accumulated defaults of the mill, and ordered resumption of its operations. The co-operative mill was closed during 2001-02 for short supply of sugarcane.
According to the Comptroller and Auditor General of India (CAG), the total loan liability of the 15 functioning co-operative sugar mills (CSMs) was Rs 1,175 crore as of March 2009 and 13 CSMs had negative worth since liabilities exceeded the assets.
Tamil Nadu is the fourth largest sugar-producing state with an annual production of 2.2 million tonnes. Sugarcane is cultivated on about 235,000 hectares every year and 15 CSMs, 20 private mills and two public sector mills are functional.