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Ponni Sugars (Erode) Ltd is set to commission its 19-MW co-generation plant by the month end.
This will be a significant development for the company in terms of revenue generation and potential growth to the top line.
Mr N. Ramanathan, Managing Director, Ponni Sugars, told Business Line that the project is being completed on schedule and well within the estimated project cost of Rs 102 crore.
The costs have been contained despite increase in the base rate, he said.
Initially, the cogeneration plant will operate at 15 MW which will help generate a surplus of about 11 MW that will be supplied to the State grid.
At full capacity, the surplus supplied to the grid will increase to about 14 MW. This will mean an additional revenue of about Rs 45 crore a year for the company at the current tariff level of Rs 4.47 a unit.
Ponni Sugars has tied up for a bank loan of Rs 65 crore and a loan under the Sugar Development Fund for about Rs 25 crore. The balance is through internal accruals.
The current sugar season has been a good year for Ponni Sugars, with sugarcane arrivals set to grow significantly over that of last year and sugar recoveries also increasing.
During 2010-11, the company crushed about 6.3 lakh tonnes (lt) of sugar and in the current year this is expected to increase by about one lt. This, along with the 50-basis-point increase in sugar recovery observed so far in the current season, augurs well for the company, he said.
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