The Hindu Business Line : Dollex set to acquire Godavari Manar Sugar

The ethanol, potable alcohol and rectified spirit manufacturer Dollex Industries will formally acquire Godavari Manar SSK Sugar Factory, a loss making and closed Maharashtra cooperative sugar mill on Monday next for a six-year renewable lease.

Mr Anis Khan, CEO of Dollex Industries confirmed to Business Line today from Mumbai that a deal with Nanded District Cooperative Bank, which currently owns the mill, would be signed on August 21. The crushing operations at the unit would begin in November 2006, after a gap of four years. "In the first year, we expect to crush 3 lakh tonnes of cane," Mr Khan said.

Dollex has planned to set up an ethanol unit with a capacity of 30 kilo litres per day (klpd) at an estimated cost of Rs 22 crore at the Godavari sugar mill premises at Nanded. "As per the agreement, we can set up the ethanol unit. However, the unit could be operational only at the end of the first crushing season ending March 2007. The ethanol unit would get full excise relief for captive consumption of molasses produced by the sugar mill under the terms," he stated.

Dollex closed at Rs 50.80, after touching a day's high of Rs 52 on the BSE. The stock has risen by more than 41 per cent in the last one month.

Dollex already has a 40-klpd potable alcohol unit in Goa and a 30-klpd ethanol-cum-rectified spirit manufacturing facility in Karnataka.

For the first crushing season, molasses to be produced at the Nanded mill (4 per cent of the total crushed quantity) would be consumed by the Karnataka unit. Dollex' profit and sales are likely to improve during 2006-07 following the acquisition.

Domestic ethanol producers, led by Indian Sugar Mill Association, are expected to thrash out an ethanol price band before October 2006, when tenders from oil producers for mandatory blending are scheduled to be floated.

More Stories on : Mergers & Acquisitions | Breweries | Sugar

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