GMR may launch branded sugar

GMR Industries Limited is mulling sale of branded sugar in Karnataka and Andhra Pradesh.

While the company has decided to go ahead on branding in Karnataka where it is planning to build a new sugar complex at a cost of Rs 232 crore by September 2007, it is studying the market in Andhra Pradesh for the same.

Speaking to the media in connection with the announcement of second quarter results, K Narayana Rao, managing director, GMR Industries, said the company has engaged the Indian Marketing Research Bureau (IMRB) to study the market viability for branded sugar in the state.

According to him, sugar refinement and packaging will cost any where between 75 paise and Re 1 per kg and require about Rs 20 crore investment in the machinery. "If the market survey indicates that this extra cost can be recovered, we will go ahead and introduce our branded sugar in Andhra Pradesh too." he said.

The company is also expanding the crushing capacity of its sugar factory in Srikakulam from the existing 3,125 tonnes to Rs 5,000 tonnes (TCDs).

Giving the reasons for choosing Karnataka as its next destination for sugar production, Rao said that while Karnataka offers 200-240 crushing days, in Andhra the crushing season lasts for about 150 days. Adding to this advantage is the higher recovery rate in Karnataka, which is more than 11 per cent as compared to about 10 per cent in Andhra, he said.

More than anything else, the existing tariff and other guidelines for co-generation, which is essential for the sustenance of sugar production, are favourable in Karnataka as compared to the tariff structure and plant load factor (PLF) restrictions in Andhra Pradesh, he said.

The other investment plans of the company for the coming years include Rs 52 crore wind energy project in Karnataka and a Rs 18-mw co-generation unit in Maharashtra.