Chennai, Oct. 31
PONNI Sugars Erode Ltd plans to expand its sugarcane crushing capacity by 500 tonnes a day to 3,000 tonnes a day. With this, it would process an additional one lakh tonnes annually.
According to officials, the company hopes to put in place equipment at an investment of Rs 2 crore. Significantly, the company's incremental margin, at current sugar prices, is about Rs 200 on every tonne of sugarcane crushed. This represents at least Rs 2 crore of additional revenues every year.
With sugarcane output expected to increase continuously over the next two seasons, the company will recover the cost in the first year and in subsequent years, there will be added value. Ponni Sugars can now crush about 6.5 lakh tonnes of sugarcane a year.
It has reported a net profit of Rs 2.14 crore on net sales of Rs 29.94 crore for the quarter ended September 30, 2005. During the year-ago period, the company reported a net profit of Rs 82 lakh on net sales of Rs 20.61 crore.
On the BSE, the Ponni Sugars (Erode) stock closed up at Rs 34.35 on Monday over its previous close of Rs 33.80.