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Our Bureau

Chennai, July 11

Ponni Sugars (Erode) Ltd, which is awaiting formal clearance for a new composite sugar mill, plans to modernise its existing sugar mill at Erode. According to Mr N. Ramanathan, Director (Finance), the modernisation will increase its capacity to crush about 10 lakh tonnes sugarcane a year from the current 8.5 lakh tonnes. The modernisation is expected to cost the company about Rs 10 crore, which would be funded through internal accruals. The move is crucial as efficiency gains become more important in the face of the anticipated drop in sugar prices for the coming year. The Government's decision to curb exports in the face of the expected increase in production in 2006-07 in Tamil Nadu means that sugar prices may not be buoyant, he said.

At the annual general meeting later this month the company will seek its shareholders' approval to hike its borrowing limit to Rs 250 crore from Rs 100 crore. The move is aimed at paving way for a new composite sugar mill with distillery and cogeneration facility. The company has sought the State Government's clearance and allocation of sugarcane area. The company is committed to this expansion at the earliest, he said. The project would include a 2,500 tonne a day sugarcane mill, 20 MW cogeneration unit and a 60 kilolitre a day distillery.

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Ponni Sugars plans to modernise unit

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