KSCL banks on sugar business; mulls expansion

In an effort to boost its operations, Kothari Sugars and Chemicals Limited (KSCL) is exploring the feasibility of stabilising and expanding its sugar business.

A company source told Business Standard that of the two segments of business that the company is engaged in - chemicals and sugar - it is of the view that sugar is a better option to concentrate on in the long term. The company is considering the possibilities of expanding its sugar business and focus exclusively on the segment.

Accordingly, KSCL has informed that the board of directors had considered and approved the hiving off of the polybutene plant situated at Manali. However, the board is examining the possibilities of selling the chemical business unit.

Kothari Sugars was declared a loss-making unit in 1999-2000. After filing an appeal against the order of the Board for Industrial and Financial Reconstruction (BIRF) to wind up the company in 2002, it was given a rehabilitation scheme in June 2004 by the Appellate Authority for Industrial and Financial Reconstruction.

The rehabilitation package comprised a relief of about Rs 160 crore to bring down accumulated losses of Rs 233 crore to Rs 60 crore.

The company operates a sugar mill complex at Lalgudi in Tiruchirapalli district with a capacity to crush 2,900 tonne sugar per day (TPD), besides an 11-megawatt co-generation plant and a distillery with a capacity of 45 kilolitres a day.

The company source also said that the sugar division contributes to around 50 per cent of KSCL's revenues.