The Hindu Business Line : Bajaj Hindusthan to pump in Rs 750 cr to expand capacity

With simultaneous brownfield capacity enhancements at its existing locations, the company's total cane crushing capacity for the season beginning October 2006 will increase from 53,000 tcd to 95,000 tcd, which will produce around 2 million tonnes of sugar a year.

This expansion will place the company among the top five global sugar manufacturers, Mr Kushagra Nayan Bajaj, Chief Executive, said.

Fund requirements for the expansion have been completely tied up. Of the Rs 750 crore, Rs 261 crore is through a GDR issue, Rs 217 crore through bonds and Rs 272 crore from internal accruals.

Having drawn up the expansion plan the company has decided to withdraw its bid for 24 sugar mills in Uttar Pradesh. Mr Bajaj said because of the inordinate delay in the divestment process the company has decided to go in for expansion.

However, it would look at acquisition for further growth as possibilities of capacity expansion are exhausted with this expansion.

Q3 net trebles

The company has reported a 285 per cent increase in net profit at Rs 52.9 crore for the June 2005 quarter compared with Rs 13.8 crore in the year-ago period. Higher production led to improved profits.

"The industry is currently on an upswing of the sugar cycle with a sharp shortfall in production and a widening demand-supply gap. This presents an opportunity for Bajaj Hindusthan," the company said in a news release.

Gross turnover increased by 244 per cent to Rs 366.9 crore from Rs 106.7 crore in the year-ago period.

For the nine-month period, the company reported a 200 per cent increase in net profit at Rs 84.6 crore against Rs 28.23 crore in the year-ago period.

Total income moved up by 95 per cent to Rs 599.08 crore (Rs 306.91 crore).

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page