The Hindu Business Line : Usher Agro to produce power from rice husk

Mumbai, Nov. 6 Uttar Pradesh-based agri-processing company, Usher Agro Ltd, will set up a new company Usher Eco Power Ltd to produce power from rice husk and edible oil.

captive power plant

To begin with, the company plans to set up a captive power plant that will use rice husk as fuel.

“The venture involves an investment of about Rs 80 crore,” said a source close to the development.

Bran processing

A bran oil processing unit to produce edible oil will come up alongside the plant.

Mr Vinod Kumar Chaturvedi, Managing Director, Usher Agro Ltd, said: “The board of the new company will meet on November 17 to decide on the investment proposal and consider various other matters.”

Carbon credits

The fuel use will qualify the company for carbon credits under the Kyoto Protocol.

A 10-million tonne of husk is said to generate 1,000 MW, besides 10 mt of carbon credits worth $30-50 million. Husk is a dependable biomass for incidental power generation in rice mills and its availability is sustainable.

Upping capacity

Besides, owning a roller-flour and rice mills in Uttar Pradesh, the company also owns a rice milling plant in Bihar.

Usha Agro intends to raise its rice milling capacity to 2 lakh tonnes per annum with an investment of Rs 40 crore.

Diversification

“This diversification towards captive power generation and edible oil production will certainly provide fillip to the EBITA margins of the company,” Mr Chaturvedi said.

India is one of the major players in the global rice industry with a production of about 90 mt and is expected to raise production to 140 mt by 2010.

Non-Basmati share

Non-basmati rice contributes 80 per cent of the country’s total production.

Indian share

Uttar Pradesh, Bihar, West Bengal and Madhya Pradesh are major rice producing States. India contributes about 10.7 per cent (74.25 mt) of the world production.

IDBI arm study

A recent study by IDBI Capital Market Services indicates that apart from fulfilling the power needs of rural India, Usher Agro EBIDTA margins would increase from 9.8 per cent to 13.6 per cent in the financial year 2009.

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