Sukhjit Chem to set up unit in Himachal Pradesh

Phagwara-based Sukhjit Starch and Chemicals, a market leader in making starch and corn-related products, is putting up another unit in Himachal Pradesh. It will be its fourth unit in India.

The existing facilities are located in Phagwara (Punjab), Nizamabad (Andhra Perdesh), and Malda (West Bengal).

The new unit is being set up in the excise-free zone of Taliwal, Una, in an area of 280 acres. The promoters have decided to invest Rs 30 crore through debt and internal accruals.

Talking to Business Standard, the joint managing director of the company, K K Sardana, said: "While about 220 products can be prepared from corn, our company is making 20 products. We are in this business since 1943, and we've listed on the Bombay Stock Exchange in 1947, and of late, the fourth generation of promoters has joined operations."

Sukhjit Starch and Chemicals started its operations with a capacity of crushing 3 tonnes of corn per day. Now it has three units with a total capacity to grind 450 tonnes of corn a day.

The company, with an annual turnover of more than Rs 110 crore, has a target of increasing it four times by 2010-2011.

According to Sardana, the promoters have planned to invest in all the four units but in a piecemeal manner. "The investment in one unit will not synchronise with another because the management believes in slow and steady growth."

He said starch demand for the food and pharma sector was rising and there was an immense potential in the domestic market.

The company manufactures dextrose, glucose, sobitol, maltose, malto dextrine, sugar free glucose and HFCS (high fluctrose corn syrup) among other products.

"With the growing awareness for zero calorie sweeteners the demand for corn based products is growing. We are expanding to cater to only the domestic demand. The export market is huge but is not lucrative for us. Our competitors in developed countries get cross subsidies on exports and dump them into African and Gulf countries those are potential markets for Indian players. So it is not viable for us to explore overseas market", said Sardana.

The company sources corn from the open market across India and is also contemplating of indulging in contract farming in the near future.