Uttam Mills to increase capacity

Expecting a turnaround in the sugar industry in the next season beginning October, Uttam Sugar Mills is investing Rs 350 crore to expand its crushing capacity to 30,250 tonnes crushed daily (tcd) from the existing 22,750 tcd.

Post expansion, the company will have the country's seventh-largest crushing capacity after Bajaj Hindusthan, Balrampur Chini, Triveni Engineering, Birla Sugar, DSCL and Dhampur.

The cogeneration of exportable power will also increase from the current 22 mw to 100 mw by next season while the distillery capacity will go up to 200 kilolitres per day (KLPD) from the current 75 KLPD.

"The worst is over for the industry and it has a bright future ahead. Sugar price is expected to recover in a year and margins will improve significantly. The expanded capacities will become operational in the 2008-09 season," said Raj Kumar Adlakha, chairman and MD of the company.

All the sugar companies based in Uttar Pradesh have been incurring losses since last 2-3 quarters due to high sugarcane prices in the state and low sugar realisations.

"We expect a correction in sugarcane prices with the legal intervention. Currently, we are paying Rs 110 a quintal for sugarcane according to the High Court's interim order", he added.

The company currently has 3 sugar units in Uttar Pradesh-Barkatpur (Bijnor) where capacity will go up to 10,000 tcd from the current 7,000 tcd, at Khaikheri (Muzzafarnagar) capacity will go up to 7,000 from 4,500 tcd, at Shermau (Saharanpur) plant capacity will increase to 7,000 from 5,000 tcd. The fourth unit at Libberheri (Haridwar) in Uttarakhand will continue with the existing capacity of 6,250 tcd.

"We will be selling 100 mw of power to the Uttar Pradesh Power Corporation in the next sugar season," he said.

The distillery at Barkatpur, equipped to manufacture rectified spirit and ethanol, will also use molasses from the three other units that do not have a distillery.

For the year ended September 30, 2007 the company registered a turnover of Rs 296.41 crore and a loss of Rs 27.07 crore due to a sharp decline in sugar prices.