Vivek Saraogi, managing director of Balrampur Chini Mills, one of India’s laregst integrated sugar producers (daily crushing capacity of 73,500 tonnes, from nine factories, apart from making and selling ethanol, power and organic manure), finds government policy distinctly short-sighted and depressing, he indicates to Ujjval Jauhari. Edited excerpts:
The empowered group of ministers recently approved sugar export of 500,000 tonnes. What would be the sectoral impact?
It’s in the right direction, though a bit late. The announcement was expected in December, when international prices were much higher. We have had to continue selling at Rs 2 per kg lower than the cost of production due to this delayed decision.
We are nearing the crushing season end. How does it compare with the previous one?
No major benefits have accrued. We have seen the government continue raising the SAP (state administered price) for sugarcane and we have been selling sugar below the cost of production.
We are bullish on the prospects of ethanol, but the ethanol policy still needs to be well knit. Overall, there are a plethora of controls impacting the industry. The sugar industry in Brazil, post deregulation, has grown phenomenally well. Similarly, in India, a good sugar policy is needed.
The December quarter saw increased cane costs and lower sugar realisation impact profitability. Has there been any improvement ?
Not much. Cane costs have been high and realisations, too, have been similar.
Brazilian production is expected to be better than anticipated earlier. How will it impact Indian producers?
We cannot export at will and have to pay duties on imports. Thus, we cannot benefit from fluctuations in Brazilian production. The industry will need to be deregulated to grow like software, telecom, etc. That’s why I have been advocating for a wholesome policy.
What are your plans? Have you planned any expansion?
No major plans. We will continue with our present facilities though efforts continue to expand production by removing bottlenecks.
