Financial Daily from THE HINDU group of publications
Saturday, Oct 30, 2004
Financial Daily from THE HINDU group of publications Saturday, Oct 30, 2004 |
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Corporate
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Restructuring Agri-Biz & Commodities - Sugar KK Birla Group to consolidate sugar business Our Bureau
Kolkata , Oct. 29 THE K.K. Birla Group, which owns the largest sugar crushing capacity in India as a group, has initiated moves to consolidate its sugar business both in terms of geographical relocation and financial integration. According to a notice issued by the group to the stock exchanges, the sugar business of the Bihar-based New India Sugar Mills Ltd will be merged with Upper Ganges Sugar & Industries Ltd. New India's sugar factory is located at the Samastipur district of Bihar but it will be shifted to UP. Its crushing capacity will also be expanded to 5,000 tonnes per day from the present level of 1,750 tonnes. A senior company official said the management was forced to take this decision because the Samastipur region is prone to floods, which destroys the sugar crop regularly. As on March 31, 2004, New India had brought forward tax losses of Rs 22 crore. It was decided that Saran Trading Co Ltd, a wholly owned subsidiary of New India, would first be merged with New India and then the sugar business of the latter would be taken out of it and merged with Upper Ganges. Apart from the sugar business, New India holds some important investments, which would remain with it. This means that post-merger New India would become just an investment company. The management of the K.K. Birla Group, the official said, was still working on the details of the merger along with the nitty-gritty of the relocation of New India's sugar unit. At present, the total sugar crushing capacity of the K.K. Birla Group is a little over 36,000 tonnes per day. With the capacity expansion of New India's relocated unit, the group crushing capacity would touch almost 40,000 tonnes per day. One of the other two sugar companies of the K.K. Birla Group is Oudh Sugar. The company, with a crushing capacity of 17,500 tonnes crushed per day, has one unit in Bihar and two in UP. The other company is Govind Sugar, which has one unit in UP with a crushing capacity of 5,000 tonnes per day.
More Stories on : Restructuring | Sugar | Mergers & Acquisitions
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