Chennai, July 13 (IANS) In an attempt to turn all its sugar mills - cooperative and public sector - profitable, the Tamil Nadu government is planning to upgrade them and make them integrated complexes having co-generation power plants, ethanol and distillery plants.
According to a policy note for the industries department submitted to the state assembly by Deputy Chief Minister M.K. Stalin Monday, the government has programmed to establish co-generation plants in all 15 cooperative and two public sector sugar mills at an outlay of Rs.1,177 crore.

The co-generation power plants will be set up through the Tamil Nadu Electricity Board (TNEB) and the proposed additional capacity to be added is 234 MW.

According to the note, seven parties have responded to the tender issued by TNEB for setting up co-generation plant.

After setting up ethanol plants at Salem and Amaravathi Cooperative Sugar Mills last year, action is being taken to set up ethanol-cum-distillery plants at M.R. Krishnamurthy and Cheyyar Cooperative Sugar Mills.

The note states, the state-owned Arignar Anna Sugar Mills and Perambalur Sugar Mills will set up co-generation and distillery plants as a part of their rehabilitation programme.

The state has demarcated the cane area for setting up nine integrated sugar complexes by the private sector with facilities for cogeneration of power, distillery and ethanol production, tissue culture lab, soil testing lab and bio-compositing facility.

According to the policy note, these mills will bring their entire sugarcane area under drip fertigation in span of five years.

The nine projects belong to Kothari Sugars (in Ariyalur), Rajshree Sugar (Gingee), Sakthi Sugars (Erode), Dharani Sugars, (Sankarapuram), Empee Sugars (Ambasamudram), Sri Ambika (Attur), Dhanalakshimi Srinivasan (Veepanthattai), Bannariamman (Thandarampattu) and Madras Cements (Tirukoilur).

According to the policy note, out of 41 sugar mill in the state, 38 are in operation with an installed cane crushing capacity of 132,000 tonnes per day.

The state contributes 11 percent of the national sugar production every year producing around 1,616,000 (1.6 million) tonnes.

As a result of lower production and depleting sugar stocks, the average realisation from sale of sugar is on the rise to Rs.2,025 per quintal during April-June 2009 as against Rs.1,505 per quintal during the corresponding period the previous year.