The Hindu Business Line : EID Parry, Cargill to set up sugar refinery in AP

SUGAR SET-UP: Mr A. Vellayan (left), Vice-Chairman, EID Parry, and Mr Daudi Lelijveld, Project Manager, Cargill Sugar, Geneva, at a press conference in Chennai on Monday. — Bijoy Ghosh

Chennai , April 24

EID Parry (India) Ltd, a Murugappa group company, and Cargill International will together set up a port-based sugar refinery in Kakinada, Andhra Pradesh, with an investment of Rs 325 crore to tap the export market.

At a press conference here on Monday , Mr A. Vellayan, Vice-Chairman, EID Parry, said the refinery would be an independent entity in which EID Parry would hold a 51 per cent stake and Cargill 49 per cent. The facility, which would be an export-oriented unit or be located in a Special Economic Zone, would start operations by December 2007 with an initial capacity of 6,00,000 tonnes a year and be expanded to a million tonnes. This would be the largest of its kind in South Asia, a major market it hopes to tap. It would import raw sugar from markets such as Brazil, South Africa and Thailand.

Parrys Sugars Refineries Pvt Ltd will be the vehicle for the joint venture, which will receive over Rs 72.5 crore as initial equity from EID Parry.

Market leaderS

The project brings together two market leaders — Cargill, an international sugar trader, and EID Parry, a leader in sugar milling, converting raw sugar to white sugar and port-based operations, he said.

Mr P. Rama Babu, Managing Director, EID Parry, said the joint venture reflects an emerging global trend in which sugar refineries are being set up close to consumption centres. Such units are being established in West Asia, Africa and parts of Europe, he said.

Mr Daudi Lelijveld, Project Manager, Cargill Sugar, Geneva, said that Cargill brings to the table its expertise in supply chain management and trading ability. It has such facilities in Brazil, Mexico and is setting up one in Syria.

With European Union obliged to cut down on subsidy-driven sugar exports there is a deficit of over six million tonnes in the export market. In the markets that can be reached from India alone there is a 3-million tonne deficit.

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