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Thiru Arooran Sugars Ltd.

BSE: 507450 Sector: Agri and agri inputs
NSE: THIRUSUGAR ISIN Code: INE409A01015
BSE 00:00 | 31 May Thiru Arooran Sugars Ltd
NSE 05:30 | 01 Jan Thiru Arooran Sugars Ltd
OPEN 7.00
PREVIOUS CLOSE 6.83
VOLUME 3091
52-Week high 7.00
52-Week low 0.00
P/E
Mkt Cap.(Rs cr) 8
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 7.00
CLOSE 6.83
VOLUME 3091
52-Week high 7.00
52-Week low 0.00
P/E
Mkt Cap.(Rs cr) 8
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Thiru Arooran Sugars Ltd. (THIRUSUGAR) - Chairman Speech

Company chairman speech

THIRU AROORAN SUGARS LIMITED ANNUAL REPORT 1999-2000 CHAIRMAN'S REPORT Chairman's Overview During the period under review, the Government of India finally decided to act on the vexatious issue of sugar imports by increasing the Customs Duty from 27.5% to 60%. Besides, the Government also finally accepted the industry's demand for a level playing field and subjected imported sugar to the same levy obligation as imposed on domestic sugar producers and further subjected imported sugar to the same regulations on sale and distribution as applicable to the domestic producers. With these new regulations in place, the import of sugar has stopped since April 2000, providing a much needed boost to market sentiment. Besides, the Government also announced a change in the levy free ratio from 40 : 60 to 30 : 70, as a first step towards eventual decontrol. Both of these initiatives were certainly in the right direction, though belated, but the industry continued to be plagued by excess stocks due to the huge carry over from the previous season (69 lakh tonnes), as also from the huge increase in production during the season to a record level of 183 lakh tonnes. The huge over hang of stocks resulted in un-remunerative prices in the free sale market as well as severe liquidity problems since banks were unwilling to increase their working capital exposure to the sugar industry, which was perceived as a whole, to be not credit worthy. In addition to the depressed conditions in the sugar market, there was also a tremendous glut of molasses and alcohol, especially in the State of Tamil Nadu, as a result of the higher cane crush and this resulted in a steep fall in the realisation on sale of molasses as well as alcohol. The surplus of molasses was so large that exports at depressed prices had to be resorted to so as to clear the storage tanks to receive the next season's production of molasses. The industry has made a strong pitch to the Government to promote an Ethanol Programme for blending alcohol with petrol for transportation as has been in vogue for several years in countries like Brazil, USA, Sweden etc. The Government has already announced a pilot programme in this regard and concerted efforts are under way to expand the scope of this programme so as to ensure sustained off take of Alcohol in the years to come. In this context of un-remunerative sugar prices, high stock levels and steep fall in molasses and alcohol prices, it is only with great difficulty that your company was able to discharge its liabilities to the farmers as well as to the Banks and Financial Institutions. On the positive side, the company was able to realize the cane crush projected in the last Annual Report and there was also marked improvement in the recovery, pursuant of the various corrective measures put in place over the last couple of years. Sugarcane yield have shown considerable improvement with the introduction of the new varieties and we are hopeful that the ensuing season will see further improvement in both sugarcane yield and sugar recovery. However, the increasing competition from paddy, as an alternative to sugarcane, sustained by copious availability of water in the Cauvery / Mettur Dam, as well as the ever increasing procurement prices announced by the Government is a matter of serious concern and the company is exploring various alternative to cope with this new scenario. As regards the outlook for the next year, a lot will depend on the extent to which sugar exports take off, since the industry is expecting another year of bumper production. Though some exports have already taken place on the strength of rising international prices and the weakening rupee, it is too early to make any definite forecast on the likely quantum of exports during the years ahead. Though domestic consumption is increasing at the rate of around 10 lakh tonnes per annum, the industry can breathe easy only if 20-30 lakh tonnes of sugar can be exported out of the country during the coming year. On the policy front, the Government is expected to further liberalise the sugar regime with further reduction in the levy free ratio as well as introduction of futures trading in sugar. While these policy initiatives certainly bode well for the future of the industry, the immediate problems of glut and liquidity constraints need to be addressed before emerging opportunities can be capitalised upon. The period under review also saw the spinning off of the cogeneration business into a separate subsidiary company, so as to sharpen the focus on each of the separate businesses as well as to enable the raising of capital from investors who are interested in the power business as opposed to the sugar business. This is expected to start a new trend in he structuring of sugar mill cogeneration projects in the country. R V Tyagarajan Chairman and Managing Director
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