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Thursday, Jul 22, 2004

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Ponni Sugars trying new sources of raw material

Our Bureau

Chennai , July 21

PONNI Sugars (Erode) Ltd is testing the waters for additional sources of raw material for its sugar mill to produce sugar and ethanol.

Addressing the annual general meeting here on Wednesday, its Chairman, Mr N. Gopalaratnam, said that it would cultivate sweet sorghum on a trial basis in collaboration with the Tamil Nadu Agriculture University. Sweet sorghum, along with jatropha and sugar beet, is one of the crops that the State Government is encouraging as an alternative to the water demanding sugarcane.

The company is faced with a shortfall in sugarcane due to drought and has resorted to importing raw sugar to utilise existing capacity. It has imported about 10,000 tonnes of raw sugar. It is hoping the North East monsoon would be normal and help sugar cultivation improve for the next season, he said.

For the company, which is just out of a restructuring exercise that saw it exit its sugar milling operations in Orissa, 2003-04 saw a significant increase in profits, three-fold increase in earnings per share and a drop in debt-equity to 1.31 from 2.35.

Its performance in the first quarter of 2004 was hit by a shortage of sugarcane. Between April and June the company crushed 12,463 tonnes of sugarcane against 82,703 tonnes in the corresponding period in the previous year. Sugar production was 909 tonnes (8,951 tonnes).

According to a press release, Ponni Sugars has reported a net profit of Rs 34 lakh on sales of Rs 19.53 crore for the quarter ended June 30, 2004. During the corresponding period in the previous year the company reported a net loss of Rs 1.28 crore on sales of Rs 18.28 crore.

Company officials said that the impact of the raw sugar import, which would augment capacity utilisation, would manifest in the second quarter. The company is also considering an investment in a distillery unit and the project report would be ready during the next two or three months.

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