EID Parry to set up 2nd co-generation unit

The Rs 450-crore sugar division of EID Parry (India) Ltd, which tied up its bagasse supply with Tamilnadu Newsprint & Papers Ltd, is now on the verge of setting up its second co-generation plant at Pugullur with an investment of about Rs 77 crore.

It is also investing Rs 10-12 crore in a sugar refinery. The 22 mw project will be commissioned on the signing of the power purchase agreement with the Tamil Nadu Electricity Board (TNEB), which is expected to happen shortly.

EID Parry has been supplying over 4 lakh tonne of baggasse to TNPL from its sugar mills at Pugullur and Pettavaithalai to TNPL's plant at Pugullur.

The project will require the relocation of the TNPL boilers to EID Parry's mill complex. With this, the TNPL investment in the project is estimated at Rs 25-30 crore, while the remaining investment in terms of turbines and other infrastructure will be made by EID Parry.

Of the 22 mw co-generated, EID Parry's captive consumption will be 15 mw. The remaining 17 mw will be sold to TNEB. At an unit price of Rs 3.15, EID Parry expects to earn about Rs 24 crore per annum from sale of power.

For the company with a total capacity 13,800 tonne crushed per day (tcd) this project will take its total co-generation capacity up to 26.5 mw. The company has a 24.5 mw co-generation plant at its Nellikuppam mill.

EID Parry is setting up 30,000 tonne per annum (tpa) sugar refinery to move up the value chain in the domestic market. The company is investing about Rs 10-12 crore in a sugar refinery, which will go on-stream with its trial run by the middle of the current fiscal.

P Rama Babu, Managing Director, EID Parry, told Business Standard "As things are looking up now, we are looking at growth options to see how the market evolves."

There is a lot of work involved in branding and packaging of the product in this segment.and investment have to be made cautiously, he explained.

While the industry's experiment with branded sugar has not taken off in a big way, there are about six to seven sugar mills moving into the refining arena. The capacities being installed are in the range of 30,000 and 70,000 tpa. Big players such as Bajaj Hindustan, Balrampur Chini, Bannari Amman are getting into the business.

As such, Daurala Sugars of UP, Renuka Sugars of Karnataka and Dhampur Sugars are in the business.

"There has not been a concerted effort to explore packaging and branding sugar in the country", K Raghunandan, vice president - sugar, EID Parry, pointed out. The company is yet to take decision on the colouring, the forms of table-top sugar (in cubes or crystals), the packaging and branding.

Nalin Khanna, general manager - sugar, EID Parry, sketching the market profile for refined sugar said, "The beverages industry picks up 1.5-2.5 lakh tonne per annum of sugar. About five to eight per cent of this goes into clear drinks which require refined sugar." Besides this, he roughly puts the market for table top sugar at 24,000 tpa.

The company is one of the one of the six distilleries that has got license to make ethanol in the state. It is waiting for the Tamil Nadu government to work out the sales tax structure with the petrochemical industry to swing into production.