The Hindu Business Line : Dollex Ind stock up on second ethanol unit plan

Dollex Industries, a fully integrated alcohol-ethanol-sugar manufacturer, after acquisition of a sugar mill in Maharashtra, has witnessed hectic activity over the past few weeks.

The stock rose from a low of Rs 35 to its all-time high of Rs 68 on Wednesday on the back of its plan to set up second ethanol unit in Maharashtra and increased profitability on account of in-house availability of raw material (molasses) for its ethanol and potable alcohol unit in Karnataka.

Dollex has commenced sale of sugar from its acquired unit at Nanded in the first week of January. The company estimates that it will get a better rate on its sugar owing to its advantageous location and quality.

Commercial production began at Nanded in December 2006 and as of January 2007 has reached full crushing capacity. Molasses produced at Nanded was being transported to its Karnataka distillery for production of ethanol and potable alcohol, said Mr Aneesh Khan, a director of the company.

Pricing edge

Earlier, Dollex used to procure raw material for the production of ethanol from external sugar manufacturers. However, with the commencement of production at Nanded, the company will have a significant pricing edge.

Mr Khan said the company was also going ahead with a plan to set up another ethanol unit at Nanded at a cost of Rs 20 crore. This unit with a capacity of 45,000 litres per day is slated to be ready in September 2007, before the next crushing season.

"We are raising funds through private placement and long-term debt, both of which would be tied up within the next 30 days," he added.

Dollex has invested over Rs 3 crore to upgrade and overhaul the Nanded unit, making it operational for this year's sugar season.

The company expects to crush at least 300,000 tonnes of cane, boosting turnover by Rs 66 crore for the current financial year.