Dalmia Bharat Sugar Industries Ltd is doubling the crushing capacity of its plant in Kolhapur to 5,000 tonnes crushed per day (tcd) by end-December.
The company is also setting up a 23-MW bagasse and coal-based co-generation plant as part of the expansion plans, B.B. Mehta, Director and CEO, Dalmia Bharat Sugar, told reporters on Thursday.
The company is investing about Rs 210 crore in expanding its operations in Kolhapur. Part of the investment is funded through a term loan from banks and the rest from internal accruals, Mehta said.
Dalmia had acquired the stressed assets of a sugar co-operative in Kolhapur in an auction last year for Rs 135 crore and has restarted the acquired plant in the current sugar season.
Total expansion cost in Kolhapur is estimated at Rs 345 crore for which the company has tied-up for term loan worth Rs 220 crore.
Mehta expects the company’s sugar output in the current 2012-13 season to increase to 3 lakh tonnes from 2.4 lakh tonnes in the previous year. Dalmia Bharat operates three sugar factories in Uttar Pradesh with a total crushing capacity of 22,500 tcd.
“We expect to commission the expanded capacity in Kolhapur and power plant by December this year,” Mehta said.
Dalmia is currently in the process of signing up a power purchase agreement with the distribution entities in Maharashtra.