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EID Parry India Limited, part of the Murugappa Group, said its Silkroad Sugar Pvt Ltd (SSPL) sugar refinery at Kakinada in Andhra Pradesh would commence operations in mid-June.
“We are starting the plant and should see sugar coming out from June,” said V Ramesh, EID Parry’s managing director, in an interaction with analysts recently.
SSPL, an erstwhile a joint venture with the multinational firm Cargill International, is now a wholly-owned subsidiary of the Murugappa Group.
The refinery project saw the light after a delay of nearly two years in its commencement, led by lack of gas supply. This led to a loss of Rs 120 crore to the company in the last two years on interest payments and depreciation costs.
Due to fuel concerns, the refinery has been converted to coal-fired project with an additional investment.
EID Parry said it was investing around Rs 60 crore in the changeover to coal-powered facility, completing an investment of over Rs 500 crore.
Ramesh said the plant’s capacity could be increased to 2,000 tonne per day, and at the peak capacity for about 300 days the production is 600,000 tonne. For 2014-15, however, it would target 300,000-400,000 tonne.
On the possibilities of merging Silkroad with the parent company, Ramesh said the first priority for them was to ensure the plant was up and running and stabilising at the main plant capacities.
The company has invested around Rs 450 crore in the facility till last year.
“The total investment will be in excess of Rs 500 crore. In terms of the coal, we are actually importing from Indonesia and have also made arrangements to ink tie up for its supply. So, coal supplies should not be an issue at all,” he added.
In December 2012, EID Parry bought the plant’s entire stake from its JV partner, Cargill Asia Pacific Holdings PTE, from their JV entity Skill Sugar Private Ltd.
With the acquisition, the equity holding of EID Parry (India) Ltd rose to 99 per cent in the JV, and SSPL became a subsidiary of the company.
