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Bajaj Hindusthan Sugar Ltd.

BSE: 500032 Sector: Agri and agri inputs
NSE: BAJAJHIND ISIN Code: INE306A01021
BSE 00:00 | 26 May 13.80 0.10
(0.73%)
OPEN

14.05

HIGH

14.05

LOW

13.05

NSE 00:00 | 26 May 13.80 0.15
(1.10%)
OPEN

13.80

HIGH

14.10

LOW

13.05

OPEN 14.05
PREVIOUS CLOSE 13.70
VOLUME 2162335
52-Week high 24.75
52-Week low 10.80
P/E
Mkt Cap.(Rs cr) 1,763
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 14.05
CLOSE 13.70
VOLUME 2162335
52-Week high 24.75
52-Week low 10.80
P/E
Mkt Cap.(Rs cr) 1,763
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Bajaj Hindusthan Sugar Ltd. (BAJAJHIND) - Chairman Speech

Company chairman speech

Perhaps our sugar could add sweetness to the pandemic and we all could just wish awaythe numbing facts and the devastating despair that has swamped the world. The second waveof COVID has brought in a dance of death wherever it arrived and India too was not spared.Globally the past eighty odd weeks has brought in a tectonic shift to lives. We were notready yet we had to step back as we shut down the world last March 2020. The skies wereempty of aircrafts buzzing around markets and businesses had shutters closed and schoolsand offices all suspended in hours. Huddled at home with just a mask to protect and handsto wash were the only preventive remedies. A year down the line by March 2021 the worldfought back hard. Never ever in world history was a vaccine researched at such good speedand introduced for use. While COVID surely has surprised us in many ways of how as humanswe are just a small actor in the brutal reality of this beautiful Universe at largemedical research and technology does instil a constant hope of sustenance in both ourpresent and future.

India's fight against COVID has been both humbling and daunting. The last two quartersof 2020-21 saw a huge bounce back of how industry stood up. Yes there were businesslosses in the sugar industry with beverages demand crashing the hospitality industry andhence restaurants and stores being shut and marriages and functions allowed in limitedvolumes. There were Government interventions to support the COVID comeback fight throughfiscal and monetary measures. In addition two leading vaccines which were beingmanufactured by our own Indian companies led the robust unlock period. However the secondwave hit India with a monstrous severity by March 2021. The unrelenting rocketing of casesalmost overnight along with deaths shook the nation despite the glimmer of hope in thehorizon of vaccination being started by February 2021.

On the global front with vaccines being given on a wider scale both Europe and USArecovered well despite a huge challenge UK and part of Europe faced due to the secondwave. The global prices of sugar remained high which has certainly been some sweet newsfor our domestic industry. In its "Sugar: World Markets and Trade" report theUSDA said global sugar production next season which is October 2021 - September 2022 inmost countries would be 186 million tonnes with the European Union India and Thailandmaking up for a fall in Brazil output. The USDA report adds that India will play asignificant role in 2021-22 season's global sugar production increasing by six milliontonnes (mt) but it could also result in the country carrying over huge stocks to thefollowing season. It is important to note that global prices are not expected to weakenthis year cause Brazil would have a 2 to 3 million tonnes less production with someestimate for less production as low as 7 to 8 million tonnes. Though inspite a fall inThai production this year it is expected to bounce back in international markets with anestimated 10.4 million tonnes of supply as per USDA. On a macro note global sugar exportsnext season are projected to increase to 65.95 million tonnes from 64.24 million tonnesthis season with Thailand likely to be the major gainer.

On the domestic front India had a rebound in production to over 30.5 million tonnestill May 31 2021 and estimated to produce 31.0 million tonnes this year from 27.4 milliontonnes last year. On the export front mills have exported a total of 4.57 million tonnesof sugar from October 2020 till May 2021 and it is estimated that overall Sugar exportsthis year would reach record high of 6.8 - 7.0 million tonnes. Of the total exportsundertaken so far maximum exports have been to Indonesia at 1.40 million tonnes thisyear. Notably India's highest export last year was to Iran and there is a possibility ofan increased export to Iran in the backdrop of oil restrictions expected to be removed byUSA. It is important to mention here that the Government has allowed ports to givepriority berth to all sugar shipments that has helped encourage a smoother and fastoutflow and reduce bottlenecks. This would especially help during monsoons where sugarbeing a hygroscopic commodity catches moisture fast and hence stocks awaiting exports inthe docks should be evacuated on priority.

Unlike last year where lockdown was sudden given the gravity of the ground threats tohealth the lockdown in the second wave had a better operational and administrativeexecution. This was possible in the backdrop of a previous experience wherein both theadministration and the industry were better prepared in terms of working under the secondset of lockdown norms and an improved set of standard operating protocols. A targetedefficiency that maximised safety of people and minimal blockages of road transportworking of industry and shifting out from blanket closure of states helped the industrytide over the operational challenges. However a candid outcome of the lockdown during thesecond wave and its true economic effects would only be known decisively towards the laterpart of the fiscal. On the ethanol front it is heartening to note that the averageblending percentage has increased from 5% last year to current level of 7.56% this yearwith Govt. target of overall 8.5% this year and it is expected that the numbers wouldlikely move up to 10.0% next year. Government targeting achieving Ethanol blending of 20%by the Year 2025 with rollout from Year 2023. Government also started trial project for100% Ethanol as fuel (E 100) at 3 locations in Pune.

On the policy front there has been a mounting payment of dues to sugarcane farmerswhich is Rs 21321 Crore as on May 31. The growing level of dues at an alarming proportionhas to be addressed in terms of an increase in the minimum selling price that would leadto an immediate relief for both the farmers and the industry. Increased revenuerealisation should continue to happen through the export route with continued requiredexport assistance for the programme and Ethanol supplies. The elephant in the room ofrising arrears has always been a huge stumbling block to any efficiency or cash flowplanning for the industry. The concerns of the industry quadruple especially causingsurvival issues for the smaller industries which have lesser headroom for efficient cashflow planning. Unfortunately rising arrears especially at such high levels would have adamaging footprint irrespective of the size of the player.

I am happy to share that your Company during the year ended March 31 2021 crushed15.603 MMT of sugarcane as against 15.845 MMT in the previous year. This year sugarrecovery was 11.06% as against 11.65% in the previous year. During the sugar season2020-21 the Company has diverted 3.915 MMT (25.09 %) sugarcane for producing B-heavymolasses owing to which sugar recovery was lower. During the year the Company produced1725981 MT sugar (previous year 1845270 MT) and 532403 MT C-molasses (previous year712011 MT) and 251560 MT B-heavy molasses (previous year Nil). The Company sold1852660 MT of sugar and 423397 MT of molasses during the year as against 1870362 MTof sugar and 465568 MT of molasses during the previous year.

The Company produced 29335 KL of Ethanol out of B-heavy molasses during the year.Ethanol sales during the year produced from B-heavy molasses stood at 24970 KL at anaverage realisation of Rs 57593 per KL. Ethanol sales from molasses produced from C-heavyroute stood at Rs 59292 KL at an average realisation of Rs 42702 per KL as compared toRs 62174 KL at an average realisation of Rs 41641 per KL in previous year.

During the year Power generation was at 751.43 Million Units (MUs) as against 780.52MUs in the previous year. The Company exported 186.66 MUs of power as against 217.94 MUsduring the previous year.

Our driving force has been our entire team without whom the challenges of the industrywould never have been fought. It is critical that the strength and fabric of your Companyalways has the support of all our colleagues and their families to establish us as one ofIndia's leading player in the sugar industry. These are extreme trying times with theconstant threat of COVID and not a single human being has been spared or insulated fromthe dreaded pandemic directly or indirectly.

The earnings of the Indian sugar industry while at present can look forward to beingsupplemented from the export markets & Ethanol as it also helps in tacking excessSugar stocks increase in Sugar MSP is required for constant income sustenance and paymentof cane arrears. In the long run rationalisation of Cane pricing in line with endproducts revenue will be the sustainable solution. Global prices may soften with anychange in weather especially in Brazil or Thailand. In India we had good monsoons in therecent past leading to good production. It's imperative that a more constant income flownot limited to export markets is devised in terms of policy for the industry and for oursugarcane farmers. I reiterate Niti Aayog's view of how minimum selling price remains akey policy determinant for a healthy growth of the industry.

I take this opportunity to thank all the stakeholders including central and stategovernment authorities bankers shareholders suppliers customers and businessassociates for their support in managing the Company. I sincerely wish the ongoingnationwide vaccine drive by the next year makes our nation a more robust and healthynation that would continue with the formidable growth momentum.

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