Chief Minister Raman Singh yesterday laid the foundation stone of the factory, to be constructed at Biseshar village of Pandaria block at a cost of Rs 163.12 crore.
The factory premises would be spread in an area measuring over 80 hectares.
"The state government is making every possible effort to promote the agriculture-based industries in the state in a bid to improve the economic condition of the farmers," the CM said while addressing farmers on the occasion.
Singh also distributed certificates among stock-holder farmers. He further called upon the farmers to take interest in sugarcane production apart from paddy cultivation.
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Notably, this is the fourth sugar factory of the state and second in Kabirdham district, based on cooperative model.
The two other sugar factories are already functioning at Kerta of Surajpur district and Karkabhat of Balod.
This factory, which has been named after India's 'Iron man' Sardar Vallabbhai Patel, will benefit about 20,000 farmers living in Pandaria region of Kabirdham, besides Mungeli and Bemetara districts, he said.
Cooperative and Culture Minister Dayaldas Baghel and Agriculture and Water Resources Minister Brijmohan Agrawal were among other dignitaries present on the occasion.