The Hindu Business Line : Ponni Sugars (Erode) to set up distillery

PONNI Sugars (Erode) Ltd is to set up a distillery connected to its sugar mill at Erode. It plans to invest Rs 12 crore to produce 30 kilolitres of ethanol a day. This can be scaled up to 60 kilolitres later, according to company officials.

The company, which saw a part of its operations being wound up in a restructuring exercise, expects 2004-05 to be eventful. Opportunities for expansion exist but as in any agriculture-dependent operation the rain god holds the trump card.

It may be recalled that Ponni Sugars (Erode) was a part of Ponni Sugars and Chemicals Ltd (PSCL), which operated the sugar mill in Erode, Tamil Nadu, and one in Bolangir, Orissa. The company was split into two - Ponni Sugars (Erode) and Ponni Sugars (Orissa) - after the Orissa operations continued to make a loss.

The Madras High Court on April 2 directed the winding up of Ponni Sugars (Orissa) Ltd and appointed the Official Liquidator to liquidate the company.

According to company officials, the secured lenders have taken steps to sell off the assets of the Orissa facility for Rs 11 crore and have recovered Rs 4 crore. The balance is in the pipeline. With the Orissa issue behind them, they hope to improve performance at the more viable Erode facility.

Ponni Sugars has concluded 2003-04 on an optimistic note, they said, and is looking to by-products, particularly ethanol, for growth. The command area available to it limits increases in sugar production. Last year the company crushed about six lakh tonnes of sugarcane despite the drought. This was because the mill purchased about one lakh tonnes of unregistered cane to make up for the shortfall in registered cane.

Company officials anticipate 2004-05 to be a crucial year. They expect growth to continue in 2004-05 despite a significant shortfall in cane - they plan to crush about 3.5 lakh tonnes-- because sugar prices are expected to be buoyant. But if the South West monsoons fail, sugarcane planting would suffer, cane availability would drop further and the next year could prove a tough one.

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