Simbhaoli mulls to buy 2 sick sugar mills in UP

Integrated sugar producer Simbhaoli Sugars is mulling acquisition of two sick sugar units near its existing plant in Uttar Pradesh at an investment of Rs 60 crore. These units running below the breakeven capacity of 5,000 tonnes crushing per day (tcd) have been accruing losses.

“The discussions with mill owners are at a preliminary stage. We plan to acquire them before the beginning of the next crushing season beginning November,” said Sanjay Tapriya, chief financial officer (CFO) of the company.

The acquisition is proposed to be funded through internal accruals. According to experts, independent sugar mills with below-5000 tcd capacity are unlikely to survive, forcing them to merge with big players or expand capacity.

In Uttar Pradesh alone, there are around 10-12 such small units on the brink of closure with a total crushing capacity of 30,000 tcd.