Balrampur Chini to borrow more for expansion

Balrampur Chini Mills, one of the largest sugar companies in the country, is doubling its borrowing limit from Rs 1,000 crore to Rs 2,000 crore to finance future expansion and diversification plans.

This expansion will make Balrampur the second largest sugar company in the country after Bajaj Hindusthan. This includes two greenfield sugar complexes in Kumbhi and Gularia in Uttar Pradesh and one state-of-the-art distillery in Kumbhi. The total project cost will be around Rs 700 crore.

The remaining amount will be kept for future acquisitions or expansion. An official of the company informed that after completion of the the two proposed greenfield units in UP, the company would have a capacity of 75,000 tonne crushing per day. The new projects would have bagasse-based power plant of 51 mw.

Commenting on the new projects, the official said that the necessary land for setting up these projects had been acquired. Both the projects would have a crushing capacity of 8,000 TCD each.

"Construction activities for these projects will start soon. We want to complete the Kumbhi project by March 2007 and the Gularia by November 2007," he added.

According to him, the company would invest Rs 600 crore in these two projects. Besides, the company is planning to set up an ethanol plant in Kumbli, which will take the ethanol capacity of the group to 320 kilolitre per day (KLPD).

"The capacity of the new plant will be 100 KLPD and the investment will be more than Rs 75 crore," he added.

The official informed that Mankapur unit at Gonda in UP had started production from November 2006. "The Mankapur unit will crush the cane for full season of 2006-07," the official added.

Incidentally, the company had acquired one sugar plant from Dhampur Sugar and Indo Gulf Industries during the year. The company had acquired the Dhampur plant in Rauzagaon in an all-cash deal of Rs 182 crore in March 2006.

The Dhampur plant has a capacity of 7,500 TCD. Incidentally, Balrampur Chini posted a net profit of Rs 291 crore over a turnover of Rs 1,905 crore in the extended financial year ended September 30, 2006.