Bajaj Hindustan, the Shishir Bajaj-controlled one of the country's largest sugar producing companies, has embarked on a major expansion strategy with Kushagra Bajaj, Shishir's son, taking over as the chief executive officer of the company. The company appears to have been put on a fast growth trajectory by junior Bajaj. |
It has seen a 40 per cent increase in sugar production capacity from 17,000 tonne to 24,000 tonne per annum over the last six months. |
Besides, the Rs 115 crore brownfield expansion plan included the installation of a new 60,000 litre per day distillery at its Palia Kalan unit in Uttar Pradesh which is expected to be commissioned in the second quarter of fiscal 2004. With this, Bajaj Hindustan will be the largest producer of ethanol in the country with a capacity of 145 kilolitres per day. |
While a major portion of the expansion was funded by internal accruals, funding through external commercial borrowings was to the tune of $8 million (around Rs 36 crore). |
In his first formal interview with the press, Kushagra Bajaj told Business Standard, "We are planning to more than double our sugar production capacity over the next two-three years. In a move to consolidate our leadership position in the industry, we have put in place a massive growth plan. We are actively pursuing organic expansion, acquisition opportunities and diversification into downstream products." |
"We are currently studying the feasibility of setting up a greenfield sugar unit at another location in UP. Our final decision would, however, depend on the success of our acquisition plans," Bajaj added. |
While he refused to comment on the estimated investment, he said around Rs 140 crore is required to set up an viable greenfield unit with a minimum capacity of 5,000 tonne per annum. |
Bajaj Hindustan has two manufacturing facilities at Golagokarannath and at Palia Kalan in Uttar Pradesh with sugar production capacity of 13,000 tonne and 11,000 tonne, respectively. The company employs around 2,000 employees and has sugarcane purchasing contract with over 2.5 lakh farmers. |