Business Standard

Sanjay Gandhi's sugar mill looks towards Maneka for revival of fortune

In 1983, Indira Gandhi, then Prime Minister of the country, had inaugurated the Sultanpur mill planned by her son Sanjay

Arindam Majumder  |  Sultanpur (Uttar Pradesh) 

Bales of sugar being packed by workers in a factory

In 1973, when Shakil Ahmed gave his 10 acres of land for a proposed sugar mill, he had dreamt of a better life. It was here in that Sanjay Gandhi, a rising politician at that point, had planned the largest sugar mill in Uttar Pradesh.

Ahmed had heard about the origin of Maruti and had expected the mill to be a centre of industrial development like the Maruti factory. Incidentally, both the Maruti factory and the mill started business in 1983- three years after Sanjay's death. And their journey couldn’t have been more different.

In 1983, Indira Gandhi, then Prime Minister of the country, had inaugurated the mill planned by her son Sanjay. More than 35 years later, while Maruti is the largest car maker in the country, Ahmed works as a machine operator in the mill. Also as secretary of the workers’ union, he spends an hour daily protesting in front of the main gate as salary hasn’t been paid to 800 workers for 22 months. “I have two sons who are unemployed and an unmarried daughter. At 47, I have little hope for a new job,” Ahmed, a graduate of Industrial Training Institute (ITI), said.

Spread over 70-odd acres in the outskirts of Sultanpur, Kisan Cooperative Sugar Mill, which was once the largest in the region due to its high-yield sugar variety, hasn’t made a profit in five years. Its loss doubled to Rs 380 crore in FY18. The plant, functioning at less than half its capacity, is staring at a closure.

In 2019 Lok Sabha polls, Maneka Gandhi, wife of (late) Sanjay Gandhi, is contesting on a BJP ticket from Sultanpur, and the sugar mill has become a central political issue. In her political rallies, Maneka has promised to bring back the lost fortune of the mill and has assured to clear the salary of the workers. On her request, the ruling BJP state government had allocated Rs 7 crore to clear the salary of workers till September 2018. "My husband got a sugar mill to I will revive its fortune," Maneka said in one of her rallies.

In fact, sugar is a bitter pill this election season in the country’s largest state as mills are bleeding. They owe crores to cane farmers, many of whom haven't been paid for months. Niti Ayog, a government think tank, says the arrears have reached "alarming" levels.

K P Shukla, general manager of the mill, blames government apathy, protectionist policy of sugar market for the present condition. “It’s simple economics. Since inception, the government hasn’t spent a penny in upgrading the machinery whereas there are multiple policies which can curb the growth of a sugar mill. A business cannot run like this,” says 56-year-old Shukla, who’s escorted by a policeman inside the factory premises to guard him from agitated workers.

“The machineries have not been upgraded for 30 years now,” Shukla says, adding that the output of the government-owned sugar mill in the neighbouring district of Bijnor has doubled after the equipment was upgraded five years ago. “Bijnor crushes 3,000 tonnes of canes per day now while my factory with higher cane production in the area can barely crush 1,000 tonnes in a day.”

The business of volume can be a win or a loss for a sugar mill as India’s sugar market is heavily controlled by the government.

In election season, government of the day typically sets up higher cane prices while lowering the price of sugar in the market to keep the electorate happy. “Sugar is most probably the most politicised crop in India,” wrote Sandip Sukhtankar, associate professor of economics at University of Virginia, who studied the linkages between and politics.

Shukla cites an incident. “During Diwali, to lower sugar price in market, the state government asked all mills to sell sugar in the market at Rs 2,550 per quintal while the prevailing rate was Rs 3,250 per quintal. We sold 50,000 quintal of sugar at that price. Taking all the expenses into consideration, it hit my balance sheet by around Rs 80 crore.”

It’s afternoon and at least 50 trucks are lined up at the mill gate. 43-year-old Munna Verma, a fourth generation sugarcane farmer, has been waiting for 20 days for his turn of crushing to arrive. “Most of the time, the mill is closed or operating at half the capacity. Our cane gets dried waiting in the sun and dried cane will not produce good quality sugar,” Verma says, adding that he hasn’t been able to crush even half of the 60 quintals he had produced. He wants to take his canes to Bijnor mill next time.

As manager Shukla steps out for lunch, he’s surrounded by workers who’ve heard about the Rs 7-crore package announced by “They have read in the papers, but how can I pay when it has not been released yet,” a worried Shukla tells this reporter and walks away.

First Published: Sat, May 11 2019. 21:09 IST