Corporate Feature

Published: Jan 15, 2022
Updated: Jan 15, 2022

VISHWARAJ SUGAR INDUSTRIES - Sweet spin-offs of sugarcane!

Karnataka-based Vishwaraj Sugar Industries is an integrated sugar company, producing sugar, power and alcoholic spirits by distillation, including ethanol, blending and bottling of Indian Made Foreign Liquor (IMFL), and generation of power. The company has an integrated sugar manufacturing facility located at Bellad Bagewadi in Belagavi district of North West Karnataka, which has been classified as a High Recovery Zone for sugar production by the Centre. The company also manufactures distillery products like rectified spirit, anhydrous ethanol and extra-neutral spirit from molasses and sugar syrup.

The company (BSE: 542852 and NSE:VISHWARAJ) has informed the stock exchanges that it has commenced production of refined-grade sugar, meeting the specifications as prescribed in the IS 1151, 2021 version. A certificate has been issued by Pune-based Mark Labs, stating that the SSgrade sugar produced by the company in its factory meets the specifications of refined-grade sugar as specified in the IS 1151, 2021 version.

NEW ETHANOL TECH

It has also informed the stock exchanges that it has been able to successfully develop a technology for sugarcane syrup preservation to enhance ethanol production. This technology is very simple, highly cost-effective and gives excellent results.

In a welcome development, a recent decision by the government to lower the GST rate to 5 per cent from 18 per cent on ethanol used for blending under the ethanol-blended petrol (EBP) programme will be extremely beneficial to sugar companies, including Vishwaraj. The reduction in the levy will help in increasing revenue and profitability of the company substantially.

ETHANOL TO OMCs

Earlier, Vishwaraj Sugar Industries had entered into contracts with oil marketing companies (OMCs) Bharat Petroleum Corporation (BPCL), Indian Oil Corporation (IOCL) and Hindustan Petroleum Corporation (HPCL) for supply of 2.50 crore litres of ethanol worth Rs 155 crore, commencing from December 2021. “We have entered into contracts with BPCL, IOCL and HPCL, for supply of 2.50 crore litres of ethanol commencing from December 2021, as against the supply of 2.25 crore litres of ethanol last year,” the company’s Executive Director Mukesh Kumar has said. With the higher ethanol supply and increasing sugar production, Vishwaraj Sugar aims to clock a turnover of Rs 500 crore in March 2022 as against Rs 426 crore last year.

The company is expanding the capacity of its Belagavi distillery unit by 150 kilo litres per day (klpd) at an estimated cost of Rs 150 crore. After the expansion, the company’s total capacity of ethanol will be 250 klpd. The environmental clearance for the higher capacity is expected to be received by February 2022.

The company has also drawn up a Rs 250-crore expansion plan for setting up a greenfield sugar factory along with a distillery facility in Karnataka. The new sugar factory, its ongoing expansion plan, its higher contracted sale of ethanol and the cut in GST on ethanol are all set to boost Vishwaraj Sugar Industries’ revenue and profit.