Empee to invest Rs.5.15 bn in sugar complex

June 17th, 2008 - 8:30 am ICT by IANS  

Chennai, June 16 (IANS) The city-based Rs.611 million Empee Sugars and Chemicals Ltd will set up a greenfield integrated sugar mill complex in Tamil Nadu’s Tirunelveli district with an outlay of Rs.5.15 billion. The mill will have a crushing capacity of 5,000 tonnes a day, which could be expanded to 8,000 tonnes, Empee joint managing director K. Jayachandran said. The project includes a 50 megawatt power plant and a distillery with a capacity of 100,000 litres per day.

“The power project will cost around Rs.2.25 billion, the remaining investment will be for the sugar mill and the distillery,” Jayachandran told IANS.

A portion of the power generated will be used for captive consumption to run the sugar and distillery operations. The balance will be exported to the state grid.

The company will also manufacture extra-neutral alcohol and ethanol at the distillery. For this, Jayachandran said, the company planned to raise sweet sorghum over 40 acres to manufacture ethanol, as this plant was less water-intensive than sugarcane.

Empee Sugars will fund the expansion through a mix of debt and equity. Of this, equity will account for Rs.1.5 billion, while the balance will be provided by the Indian Overseas Bank, the loan syndicator.

With the proposed project, Empee’s total sugar crushing capacity will go up to 8,000 tonnes a day, as it already has a facility at Nellore in Andhra Pradesh with a 3,000 tonne capacity.

Similarly, total distillery capacity will go up to 130,000 litres a day (Nellore has 30,000 litre capacity), and power generation to 70 megawatt, as a new 20 megawatt plant is being set up at the Andhra mill at an investment of Rs.60 million.

The total cane acreage will be 20,000, of which 10,000 acres will be under contract or Empee’s corporate farming initiative, Jayachandran said.

“There are several landlords owning large tracts of land. We have entered into contract farming agreements with them,” Jayachandran added.

Expecting a sugar recovery upwards of 9.5 percent from the cane sourced, he said the entire sugar chain - planting of cane saplings, harvesting, crushing - will be mechanised.

Empee also planned to set up a sugar refinery with a capacity of 2,000 bags per day inside the same complex later.

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