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The Murugappa group company EID Parry India has decided to shut down its unit at Pudukottai in Tamil Nadu.
The unit, which is not in operation because of non-availability of adequate sugarcane, will not be operated in future as the expectation of the revival of cane cultivation in the area is low due to a variety of factors, according to the company’s communiqué to stock exchanges.
The company proposes to transfer assets of the unit to its other units and also dispose of other assets as may be deemed appropriate.
Meanwhile, the company has reported a net loss of ₹53 crore for the quarter ended June 30, 2019, compared with a net profit of ₹54 crore, which was as a result of exceptional items, in the year-ago period.
In previous fiscal’s Q1, the company had recognised a profit of ₹208.76 crore on sale of bio-pesticides division and ₹35.16 crore on sale of investments in Parry America Inc.
Loss before depreciation, interest and taxes (EBITDA) and before exceptional item for the quarter was ₹31 crore compared to ₹103 crore in the year-ago quarter.
Loss after tax was ₹53 crore as against the loss of ₹81 crore.
The company’s revenue during this June quarter dropped to ₹388 crore as against ₹456 crore in Q1 of previous fiscal.
The consolidated sugar operations reported an operating loss of ₹53 crore (loss of ₹180 crore). “The performance of the Company continued to be affected in Q1 2019-20 due to depressed sugar prices on account of higher sugar inventory and release order mechanism,” S Suresh, Managing Director of the company said in a statement.
“The Government of India has further announced buffer stock subsidy programme in July 2019. This, along with the soft loans, helps reduce the holding cost of sugar inventory. Also, the government’s announcement of no change in Fair and Remunerative Price (FRP) for sugarcane for 2019-20 from that of last year is a welcome move considering the low sugar prices prevailing in the market,” he added.
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