Empee Sugars and Chemicals’ 5,000-tonne-a-day mill in South Tamil Nadu continues to idle due to inadequate sugarcane availability.

The company will not operate the sugar mill for the second year in succession during 2012-13 confirmed the company’s Chairman and Managing Director, M.P. Purushothaman.

The company is exploring various options including ways to expand sugarcane acreages. It is yet to take a decision on relocating the mill, he said.

Meanwhile, it is awaiting courts’ clearances for merger of the company with another group company Empee Distilleries. This will see the sugar mills in Tamil Nadu and Andhra Pradesh come under a subsidiary of Empee Distilleries, which will be the sole listed company in the diversified Empee Group which has interests in sugar, power and hospitality businesses.

However, the 50-MW cogeneration plant at the mill in Ambasamudram, Tirunelveli District, is generating revenues as it feeds power into the State Grid.

Restructure plans

The BSE-listed company also operates a 3,000-tonne sugar mill in Naidupet, Andhra Pradesh, and has announced plans to set up a sugar mill in Bijapur, Karnataka.

The restructure plans will take effect from April 2012 and could be in place in couple of months. Since the operations are in two States, the procedures take a little more time, he said.

Last August, shareholders approved the restructure at a court-ordered meeting. This will bring the distillery and ethanol production facilities in the sugar business under Empee Distilleries Ltd which makes Indian Made Foreign Liquor, the group’s forte, officials had then explained.

Empee Sugars’ sugar units in Tamil Nadu and Andhra Pradesh will be demerged to become a part of Appollo Wind, another entity in the group, which will be renamed Empee Sugars.

The sugar business will be ‘ring fenced’ for the management to address its issues.

For quarter ended September 30, the company has reported a net loss of Rs 6.80 crore on an income of Rs 61.26 crore.

During the corresponding period in the previous year the company reported a loss of Rs 16.91 crore on an income of Rs 41.01 crore.

(This article was published on December 4, 2012)
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