EID Parry (India) Ltd, part of the Rs 17,051-crore Murugappa group, is looking at its three factories in Karnataka and one in Andhra, including the facilities it bought from Bangalore-based GMR group, to turnaround to profit this year, according to a senior company executive.
The company would also invest around Rs 100 crore in next two years in mechanisation programmes for sugar harvesting.
Speaking to reporters after announcing the company's results for the quarter ended September 30, 2011, Ravindra S Singhvi, managing director, EID Parry , said, "We expect the three factories in Karnataka and one in Andhra Pradesh to turnaround by this year end."
The company has acquired majority share in GMR's sugar business last year, with an approximate investment of around Rs 110 crore, according to reports. GMR had three fully integrated sugar factories, one in Andhra Pradesh and two in Karnataka. In 2009 end, EID Parry also acquired another factory, Sadashiva Sugar in North Karnataka, which is also expected to turnaround this year.
The cane availability in Karnataka is expected to improve this sugar year, from 3.7 million tonne last year to around 4 million this year. "With this, we expect these companies to turnaround this year," said Singhvi.
The four factories put together has a capacity of around 13,000 tonne, which would be increased to 16,000 tonne by the current sugar season. The company would look at other states like Maharashtra and Gujarat for further expansion once the existing factories in Karnataka and Andhra Pradesh are profitable, he added.
The company is also increasing mechanisation in harvesting process and expects to invest around Rs 100 crore in next two years. It has already increased the number of harvesting machines to 14 machines so far investing around Rs 20 crore and expects to increase it to 19 machines by this year end. It would buy around 40-50 machines in next two years.
The total capacity of nine factories run by the company is around 32,000 tonne at present and it would be expanded to 36,000 tonne soon. The company expects around 25 per cent growth in sugar sector in the sugar season started October and ends in September, 2012.
On a standalone basis, EID Parry posted an increase of 397.78 per cent in profit after tax for the quarter ended September 30, 2011, at Rs 49.48 crore as against Rs 9.94 crore posted during the same period of previous year. The total income stood at Rs 419.92 crore during the second quarter of current fiscal, compared to Rs 286.45 crore during the corresponding period of last fiscal, an increase of 46.68 per cent.
