The Hindu : Bajaj Hindustan to expand capacity

Online edition of India's National Newspaper
Wednesday, Mar 17, 2004

Business

Business

Bajaj Hindustan to expand capacity

By Our Staff Correspondent

MUMBAI, MARCH 16. Bajaj Hindustan (BHL) is increasing its capacity to 31,000 tonnes crushed per day (tcd) from 24,000 tcd. The per tonne capital cost of the company is Rs. 1.28 lakhs.

In the highly fragmented Rs. 25,000 crore sugar industry, BHL has managed to stay focused on its core strength over the years and is even eying acquisitions to further augment capacity, according to Kushagra Bajaj, CEO, Bajaj Hindustan. "We will have to scale up as even post-expansion, our capacity is small. We need both critical size as well as efficiency," said Mr. Bajaj.

The company is investing Rs. 140 crores in the capacity expansion drive. Post-expansion, its market share in the sugar industry will go up to 2.5 per cent from 2 per cent. To fund the acquisition, Rs. 50 crores will come from internal accruals while Rs. 90 crores will be raised through debt.

The company plans to double its capacity in the next 3-4 years. Towards this end, it has bid for 24 sugar mills with an aggregate capacity of 38,000 tcd, which the Uttar Pradesh Government intends to privatise. The company is also on the lookout for possible takeover targets in the sugar belt of Maharashtra and Uttar Pradesh.

The company's units are located in Meerut (with a capacity of 7000 tcd), Palia Kalan (11,000 tcd and distillery capacity of 60 klpd) and Golagokaran Nath (13,000 tcd and distillery capacity of 85 klpd). It is also setting up a 60 kilolitres per day distillery costing Rs. 25 crores.

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