The Hindu Business Line : Pvt sugar mills making inroads into Maharashtra

Privatisation process
22 operational private mills totally produced 3.46 lakh tonnes sugar.
Average sugar recovery by private players lower than co-ops.
Most of these have come in the last five years with co-op links.

New Delhi , June 5

Reliance's proposed foray into sugarcane processing is seen as heralding the end of the cooperative monopoly in Maharashtra's sugar industry. But the fact is, Reliance or no Reliance, private mills are already making slow inroads into the State.

During the 2005-06 season (October-September), there were 22 operational private factories that together produced 3.46 lakh tonnes of sugar.

Fraction of co-op output

This is a fraction of the 48.51 lakh tonnesmanufactured by the 120 cooperative mills that took season. Also, the average sugar recovery (10.94 per cent) and number of crushing days (109) recorded by private mills were lower than the corresponding levels (11.77 per cent and 117 days) for cooperatives.

Yet, behind these numbers is a trend that could have significant implications in the days to come. Maharashtra's main private players today include the Solapur-based Saswad Mali Sugar Factory (47,300 tonnes) and Lokmangal Agro Industries (34,700 tonnes); the Osmanabad-based Natural Sugar & Allied Industries (36,900 tonnes) and Shambhu Mahadev Sugar & Allied Industries (19,000 tonnes); Shri Gurudatt Sugars in Kolhapur (43,000 tonnes); Pannageshwar Sugar Mills in Latur (28,300 tonnes); Gangamai Sugar Industries in Aurangabad (22,700 tonnes); the Nasik-based Dwarkadhish Sugar Factory (18,600 tonnes) and Ravalgaon Sugar Farm (17,200 tonnes); and Saikrupa Sakhar Karkhana in Ahmednagar (18,600 tonnes).

Link with cooperatives

Of these, two, Saswad Mali and the Walchand Group's Ravagaon Sugar Farm, are factories of 1940s that have survived the State-assisted onslaught of cooperatives. But the rest have all come up within the last five years and often started by men with past cooperative links. Take Natural Sugar, for instance, whose founder, Mr. B.B. Thombare, was earlier Managing Director of the Manjara Shetkari cooperative factory at Latur, set up by Chief Minister, Mr. Vilasrao Deshmukh.

Politicians' backing

Similarly, Pannageshwar Sugar's Mr Kishanrao Bhandare is said to be close to the former Deputy Chief Minister, Mr Gopinath Munde, who, in turn, controls the Ambajogai cooperative in Beed. Lokmangal Agro Industries belongs to Solapur's sitting BJP Member of Parliament, Mr Subhash Deshmukh. Saikrupa Sakhar Karkhana's promoter, Mr Babanrao Pachpute is the State's Forest Minister.

"The politicians who till yesterday were promoting cooperatives are now whole hog going the private route. And many of these new mills would be takeover targets once Reliance and other big corporates enter the scene," industry observers point out.

In fact, a process on these lines is already underway in Maharashtra. Mr. Narendra Murkumbi's Shree Renuka Sugars Ltd is, for instance, running two cooperative units at Ajara (Kolhapur) and Mohannagar (Sangli) on lease.

Whether these would lead to eventual privatisation only time will tell.

Even within cooperatives, there are early indications of consolidation.

The Warana cooperative, controlled by the Horticulture Minister, Mr. Vinay Kore, has taken on lease the ailing Shri Jarandeshwar factory in Satara, which was originally started by Ms Shalinitai Patil, wife of the late Maharashtra Chief Minster, Mr. Vasantdada Patil.