The Hindu Business Line : Sugar sector: Divergent trends in UP, Maharashtra

Diverse trends
There were 15 factories in UP that produced more than one lt each.
Maharashtra had only five one-lt plus players.
Average sugar-to-cane recovery for mills in Maharashtra at 11.75 per cent was higher than 9.51 per cent for UP.

New Delhi , May 28

Uttar Pradesh's emergence as the country's top sugar producer ahead of Maharashtra is coinciding with a significant capacity consolidation happening in the State. This is in contrast to Maharashtra, where production remains spread over a number of co-operative mills.

As per the final mill-wise data for the 2005-06 crushing season (October-September) compiled from the UP Cane Commissioner's office, over 56 per cent of the State's sugar output of 59.14 lakh tonnes (lt) was accounted for by nine groups.

UP's groups

These included Mr Kushagra Bajaj's Bajaj Hindusthan Ltd (BHL); Mr Vivek Saraogi's Balrampur Chini Mills; Mr Dhruv Sawhney's Triveni Engineering & Industries; the K.K. Birla Group; Mr V.K. Goel's Dhampur Sugar; Mr Siddharth Shriram's Mawana Sugars Ltd; Mr Ajay Shriram's DCM Shriram Consolidated Ltd (DSCL); Mr G.S. Mann's Simbhaoli Sugar Mills; and Mr Tilak Dhar's DCM Shriram Industries Ltd (DSIL).

During the just ended season, BHL's seven plants at Golagokarannath, Palia Kalan, Kinauni, Bilai, Budhana, Thanabhavan and Pratappur manufactured 7.91 lt of sugar.

Balrampur Chini's units at Balrampur, Babhnan, Rauzagaon, Tulsipur, Akbarpur and Haidergarh similarly produced 6.77 lt.

These two companies also happen to be India's largest sugar majors, heading the ongoing consolidation drive.

BHL's Pratappur plant and Balrampur's Rauzagaon facility are both acquired units: the former from P.K. Kanoria and the latter from Dhampur Sugar.

Triveni Engineering's Khatauli, Deoband, Sabitgarh and Ramkola factories churned out 4.49 lt of sugar, while the corresponding figures were 3.99 lt for KK Birla's plants at Seohara, Hargaon, Aira and Rosa; 2.92 lt for Dhampur Sugar (Dhampur, Mansurpur and Asmoli); 2.58 lt for Mawana Sugars (Mawana, Titawi and Nanglamal); 1.77 lt for DSCL (Rupapur and Ajbapur) and 1.48 lt for Simbhaoli Sugar (Simbhaoli and Chilwaria). DSIL's sole unit at Daurala manufactured 1.23 lt. In all, there were 15 factories in UP that produced more than one lt each, including BHL's Golagokarannath (2.14 lt), Balrampur Chini's Balrampur (2.04 lt) and Triveni's Khatauli (1.74 lt).

Maharashtra players

Maharashtra, as against this, had only five one-lt plus players, who together contributed below 13 per cent of the State's estimated output of 52 lt in the 2005-06 season. The biggest of them, the Sangli-based Rajarambapu Patil Sahakari Sakhar Karkhana (SSK) — controlled by Maharashtra's Finance Minister, Mr Jayant Patil — produced 1.53 lt. The Horticulture Minister, Mr Vinay Kore's Warana SSK (Kolhapur) was next, at 1.47 lt, followed by the Rural Development Minister, Mr Vijaysinh Mohite-Patil's SMS Mohite Patil SSK (Solapur), at 1.27 lt. Jawahar SSK at Kolhapur and Krishna SSK at Satara manufactured 1.25 lt and 1.13 lt, respectively.

But consolidation does not automatically imply higher efficiency levels. The average sugar-to-cane recovery for mills in Maharashtra, at 11.75 per cent, was much higher than the 9.51 per cent for UP.

The recovery rate for the country's biggest mill — Golagokarannath — was 10.64 per cent, which was lower than Rajarambapu Patil SSK's 12.91 per cent.

Even lesser known are Kolhapur's Sadashivrao Mandlik SSK and Chhatrapati Shahu SSK that recorded recoveries of 13.56 per cent and 13.39 per cent, respectively.