The Hindu Business Line : Dwarikesh Sugar gets volume boost

The commencement of cane crushing at Dwarikesh Sugar’s new 7,500 tcd (tonnes per day) sugar plant this week, marks the final stage of the company’s substantial expansion and integration plans, that have been set in motion over the past two years.

The 7,500-tcd capacity addition will take the company’s combined crushing capabilities to 21,500 tcd with effect from the current crushing season.

This may ramp up the company’s volumes and offer economies of scale that enable better utilisation of by-products. Both these factors may stand the company in good stead in a scenario of soft sugar prices, and uncertainties about where cane prices in the State will eventually be fixed.

Along with the expansion of crushing capacities, the company also has plans to expand its distillery capacities to 30 klpd and cogeneration capacities to 86 klpd. The latter may aid the company garner better realisations during the down phases of the sugar cycle, such as the one being witnessed now.

The expansion has been funded through a mixture of loans from the sugar development fund/GDR offer and preferential allotment. As with all other mills situated in Uttar Pradesh, the final court decision on State advised prices (procurement prices for cane), that is as yet awaited, will be a crucial factor that determines profitability.

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