Renuka Sugars plans overseas expansion

Sugar major Shree Renuka Sugars is mulling over various options, including a follow-on public offer (FPO), to raise funds in the coming months for its overseas expansion, even as the company has earmarked Rs 230 crore for domestic expansion.

"We plan to expand abroad and our investments will be in either crushing sugar or producing biofuels. Our investments for our overseas initiatives will be routed through an UAE-based wholly-owned subsidiary Shree Renuka Biofuels Holdings," a senior company official told PTI.

The company hopes its overseas expansion would help considerably lower the production costs.

While the official did not divulge the investments earmarked for the overseas initiatives, he said that it was open to various funding options such as ADR, GDR, QIP or even a follow-on public offer (FPO).

"We will be freezing the details within the next two months," he said.

The company is implementing a domestic expansion programme as well, which is designed to double its ethanol production. It is also setting up state-of-the-art sugar refineries in the country.

The company already has a fully-owned subsidiary in Dubai called Renuka Commodities DMCC which is into sugar trading.

On domestic front, the company proposes to double its ethanol production from the present 450 kilolitres per day (klpd) to 900 klpd by September 2009.

"The investment in this will be Rs 230 crore," he said

A part of this earmarked amount would also go towards increasing refining capacity besides setting up a new refinery plant and increasing co-generation capacity, he said.

The company is setting up a refinery with a capacity of 1,000 tonnes per day (tpd) at its existing plant at Athani in Karnataka. Another port-based refinery at Haldia with a capacity of 2,000 tpd would take its total refining capacity to 4,000 tpd, he said.

Shree Renuka Sugars recently acquired a stand-alone distillery located at Khopoli in Maharashtra for Rs 6 crore which converts rectified spirit to ethanol.

"Its present capacity is 100 klpd which can, however, be upped to 250 klpd," he said.

The company has also recently bought a 54 per cent stake in Pune-based company KBK Chem Engineering for Rs 37 crore. This company provides turnkey solutions in the field of distilleries, ethanol plants and biofuels.

Shree Renuka Sugars has a crushing capacity of 25,250 tpd and a power generation capacity of 129 mw.