Vishwanath Sugar plans Rs 425 cr expansion

Vishwanath Sugar and Steel Industries Limited, the Belgaum-based integrated sugar manufacturer has planned to double its sugarcane crushing capacity to 11,000 TCD (tonnes crushed per day) at its factory in Bellad Bagewadi in the high sugar recovery zone of Belgaum.

The company also plans to enhance the capacity of its co-generation unit to 66.40 Mw by installing new boilers and turbines at an investment of Rs 425 crore. Presently, the company operates a 5,500 TCD sugar plant with a co-gen facility to produce 36.4 Mw. The company also runs a 35 kilolitres per day (KLPD) distillery to produce ethanol, rectified spirit at its factory.

“We have secured the approval from the ministry of environment and forests (MoEF) for the proposed expansion and the application is now before the Karnataka State Pollution Control Board (KSPCB) for approval,” Mukesh Kumar, Executive Director, Vishwanath Sugar and Steel Industries Limited said. The proposed expansion would be partly funded from the funds being raised from the capital market and term loans. The company has tied up with Bank of India for a term loan of Rs 70 crore, he told Business Standard.

The company has a cane growing area of 49 villages for sourcing of sugarcane to the plant in Hukkeri taluk of Belgaum district. He said the co-generation unit presently generates up to 29 Mw, of which 7 Mw is used for captive consumption. Out of the surplus 22 Mw, 14 Mw is sold on a merchant sale basis under a Power Purchase Agreement (PPA) with Tata Power Trading Company Ltd and the balance is sold to Hubli Electricity Supply Company (HESCOM) at Rs 3.10 per unit under a long-term PPA.

“We are also planning to increase the capacity of distillery from the present 35 KLPD to 100 KLPD as we are looking at increasing the production of Indian Made Foreign Liquor (IMFL) from 2,500 boxes per day to 5,000 boxes per day. We are also in the process of launching our own whisky brand in addition to rum,” Kumar said.

Presently, the company markets its own rum under the brand “Our Choice” in select places in Karnataka and with the expansion of the distillery it is looking at expanding the market across the state and also enter the Kerala market, he said. Vishwanath Sugar has already entered into an arrangement with Bangalore-based S V Distilleries, a manufacturer of IMFL, to manufacture and sell its IMFL products in and around Bangalore.

It also distills rectified spirit for manufacturing industrial Ethanol and supplies it for blending with motor spirit and petrol to oil marketing companies such as Indian Oil Corporation Limited, Bharat Petroleum Corporation Limited and Hindustan Petroleum Corporation Limited. It supplies 4,200 kilolitres of Ethanol per annum.

For the year ended March 31, 2011, Vishwanath Sugar reported a net profit of Rs 43 crore, a growth of 2.3 times over the previous year. Its turnover grew 14.4 per cent to Rs 475 crore.