UK-based ED&F joins hands with Simbhaoli

Wins lease contract to run sick co-op unit in Maharashtra

In a first of its kind transaction, a UK-based ED&F has joined hands with Simbhaoli Sugars to bag a 15-year lease contract to run sugar cooperative unit from cane rich Kolhapur district in Maharashtra. These two companies have formed a joint venture company Unigold Company and filed bid with the state cooperation department. ED&F, which has already tied up with Simbhaoli Sugar for venture in sugar sector, operate in over 40 countries around the world. The state cabinet gave its approval on Wednesday. The cabinet also cleared the lease period to 15 years from earlier 5 years to make the venture viable.

As per the lease agreement, Simbhaoli Sugar and ED&F will take over the operations of Indira Women Sugar Cooperative Factory in Kolhapur for 15 years. The factory with daily crushing capacity of 2,500 tonne is sick.  The factory has total arrears of Rs 74.64 crore.

A state government official told Business Standard, ''The Unigold Company will have to repay the arrears of Rs 57 crore in 15 years. For the recovery of balance arrears of Rs 17.64 crore a three committee headed by the sugar commissioner has been formed. The lease may be extended by two to three years and thereafter the sugar factory will be handed over back to the Indira Women Sugar Cooperative Factory.'' The official hoped that the Unigold Company will revive the unit by bringing in professionalism.

When contacted Simbhaoli Sugars declined to comment on the state cabinet decision.

The official said that the government's decision to lease the Indira Women Sugar Cooperative Factory is in line with its recent move not to sell off the sick units. "The government has already taken a policy decision not to sell sick or closed sugar co-operative units to the private sector but lease them to cooperative units or to professional companies. This is to bring in transparency in the entire transaction and also make the unit competitive to face the competition," the officer noted.

According to the officer, recently five such lease deals were completed by the government wherein sugar units were handed over to the cooperative and professional companies.