Rana Sugars to expand

Rana Sugars Limited, a joint venture of the Punjab Agro Industries Corporation Limited is planning a Rs 200 crore expansion to increase its production and power generation capacities.

The company will set up a mono-ethylene glycol project (MEG) at the cost of roughly Rs 120 crore.

In addition, it will expand its bagasse based power projects to increase generation capacity from 20 MW to 30 MW at a cost of Rs 45 crore. It plans to sell the surplus power to the Punjab State Electricity Board.

The company has also proposed the setting up of a distillery unit with capital outlay of Rs 35 crore to manufacture ethanol and alcohol.

To fund the diversification and expansion, the company is considering an issue of rights shares at a premium of Rs 15 per share.

Rana Sugars is also set to enter the high margin manufacturing of sugar derivatives.

The company is active in research and development and is upgrading and exploring new possibilities of sugar byproducts, which also will boost its profitability.

According to reports of the task force on the sugar industry for the 10th Five-Year Plan, the estimated sugar production is targeted at 356.8 million tonne by 2006-07.

With a thrust to improve sugar production, the company's expansion into power and mono-ethylene glycol projects is expected to bolster revenues.

To improve its operational efficiency, the company has imported state of art crushing equipment from a leading foreign company and expects huge saving annually by increasing overall recovery of sugar.

Rana Sugars has proposed a dividend of 10 per cent for the year ended March 2004.

Net sales of the company amounted to Rs 85 crore with a net profit for the same period of Rs 7 crore, double of the Rs 3.44 crore in the previous year. Earnings per share increased from 99 paisa to Rs 2.04.