Chennai-based Empee Sugars has ended the 2012 sugar season without operating its sugar mill and distillery in Tamil Nadu due to unavailability of adequate cane.
The company is mulling various options including relocating the three-year-old mill to either Karnataka or Andhra Pradesh.
The Empee Group Chairman, Mr M.P. Purushothaman, confirmed that the mill in Tirunelveli district could not be operated due to sugarcane shortage in the command area. It would have been unviable to run the mill during the current season.
The company is working on encouraging sugarcane cultivation in its command area in southern Tamil Nadu, which is not traditionally a sugarcane belt. For now it has not come to a decision on relocating the mill, he said. The integrated sugar mill complex at Ambasamudram, set up at a cost of over Rs 515 crore, has a sugar mill with a capacity to process over 5,000 tonnes of sugarcane daily, a 100-kilolitre per day distillery and a 50 MW cogeneration plant. The sugar mill and the distillery, which depends on the mill for its raw material molasses, a by-product of sugar production, are not under operation.
The cogeneration power plant is running on coal and supplies power to the grid, he said. Empee Sugars has a one-year power purchase agreement with the Tamil Nadu Electricity Board, which pays it about Rs 5.50 a unit.
The sugar mill has never achieved capacity utilisation because of sugarcane shortage.
The BSE-listed company operates a 3,000-tonne sugar mill in Naidupet, Andhra Pradesh. It had earlier announced that it has applied for a sugar mill licence in Bijapur, Karnataka, to set up an integrated facility with distillery and cogeneration plants.