GMR to export 12,000 tn sugar

The company plans to export sugar to Indonesia, Bangla & Sri Lanka in the next couple of months

Hyderabad-based GMR Industries Limited is planning to export about 12,000 tonne of sugar to Indonesia, Bangladesh and Sri Lanka in the next couple of months.

The move, though on a short-scale, marks a positive change in the domestic production scenario as well as the new opportunities coming in from the export market due to phasing out of sugar subsidies by the European nations.

Speaking to Business Standard here today, K Narayana Rao, managing director of GMR Industries, said the company received permission from the Union commerce and agriculture ministries and the Director General of Foreign Trade (DGFT) to export sugar under export obligations. GMR was among the 100 companies, which once imported over 12 lakh tonne of sugar owing to the shortage in the domestic market.

Now, the government is allowing them to export sugar as the domestic production during the 2005-06 season (from October 2005 to September 2006) is expected to touch 19 million tonne as compared to about 13 million tonne during the last season.

Andhra Pradesh too is expected to contribute to the growth in production, though marginally, by achieving a production of 1.2 million tonne during the current season as compared to about 1 million tonne last year.

According to Narayana Rao, while the country's current year production was sufficient to meet the domestic demand, the estimated production of 22-23 million tonne of sugar in the next season owing to new capacity additions and increased acreage in Uttar Pradesh and Maharashtra, would result in a surplus of about 3-4 million tonne of sugar giving the scope to tap the overseas market.

"This domestic production scenario has coincided with the European community deciding to phase out the entire subsidies on domestic sugar production in the 3-year period," he said.

Gearing up to tap the emerging opportunities, GMR is scaling up the crushing capacity of its existing unit in Srikakulam to 500 tonne per day from 300 tonne by October 2006. With the expanded capacity, the company would be able to produce 1 lakh tonne of sugar a year.

Besides scaling up the sugar production capacity, the company had also set up a separate cell to explore the investment opportunities in agri processing sector, Narayana Rao said.