Dwarikesh Sugar to benefit from UP's extended deadline

The Rs 500 crore investment plan of Dwarikesh Sugar Industries in Uttar Pradesh is now eligible for government incentives after the state extended the deadline for a particular scheme by another year.

The company is now eligible to get the advantage of various incentives given by Uttar Pradesh under the Sugar Industry Incentive Scheme after the state government recently extended the eligibility date till March 31.

In a communique to the Bombay Stock Exchange, the sugar company said it would incur profits from undertaking the planned investment of more than Rs 500 crore in setting up a greenfield plant at Dwarikesh Dham and capacity expansion of existing plants in UP.

The UP government launched the scheme in 2004, announcing a host of incentives like capital subsidy of 20 per cent for investment of more than Rs 350 crore in the sugar industry.

Other incentives included subsidy in transportation assistance, rebate in entry tax, sales tax, purchase tax, etc.

With the eligibility of the incentive scheme extended, the company is likely to gain about Rs 100 per quintal in producing sugar, while cost of production too would be less, said B J Maheshwari of Dwarikesh Sugar. "We have already invested about Rs 300 crore so far in the state after the scheme was announced," Maheshwari said.

The company has lined up an investment plan of Rs 12 crore for expansion of co-generation facilities at its Dwarikesh Nagar sugar production unit. It has set up a new distillery of 30,000 lts per day capacity at Rs 13 crore, also at Dwarikesh Nagar.

In Dwarikesh Puram, the sugar major said, a second plant of 7,000 TCD capacity expandable to 10,000 TCD is already operational since January this year.

Its 9 Mw power plant is also coming up in the area. Both the projects would cost the company Rs 150 crore, it said. The company's capacity expansion plan of its existing unit at Rs 100 crore is in progress at Dwarikesh Puram.

Construction of its third greenfield plant of 7,500 TCD capacity with an investment of Rs 250 crore, is in progress at Dwarikesh Dham, where the company's 36 Mw power plant at Rs 100 crore is also coming up.

With the commencement of its second plant in September 2004, Dwarikesh Sugar's recovery rate during 2006-07 sugar season is expected to improve by 30 bsp to 10.40 per cent from 10.10 per cent last year, the company said.