EID Parry, part of Murugappa Group and one of the largest sugar makers in the country, said it will have a capex upwards of Rs 350 crore for current fiscal as well as next year, which will mainly be utilised for capacity expansion.
A Sridhar, CFO of EID Parry, told in a recent earning call that the overall capex the company is looking at for this and next fiscal years would be about Rs 364 crore, including the Bagalkot plant expansion which was already carried out during the year and the Haliyal unit expansion which is currently happening. “With the Sankili plant expansion that is likely to happen, the overall capex spends for this fiscal and next fiscal year should be around Rs 350 crore, all put together. There are no further projects as of today,” he said.
EID Parry has been working towards the debt reduction mode on a periodical basis and the debt position has been much better compared to what it was as of March 2021. The long-term debt in March 2021 was around Rs 200 crore and currently it is about Rs 101 crore. As far as the short-term loan is concerned it was Rs 355 crore in March 2021 and the company is are currently at Rs 102 crore, he said.
S Suresh, MD, EID Parry, said that during the current year the capacity of Haliyal has been added up by almost around 4,000 TCD (tonne of cane per day) because of the assets movement from Pudukottai to Haliyal. This would take the total to 11,500 TCD. “We have been growing on cane volumes by increasing the planting and by moving the unutilised asset in Tamil Nadu to Karnataka where cane availability is more. So, with the cane volumes going up, our fixed cost is going to be absorbed better and will boost our overall profitability. Second is about the increased production of ethanol by investing in distillery. Bagalkot has already come in place and we are also investing in 120 KLPD (kilo litre per day) at Sankili. So with all these, the increased cane volume will produce more molasses, more syrup and instead of producing sugar we are now putting up the additional capacities for distillery thereby we are in a position to liquidate the stocks at the earliest, improve the cash flow and also get better realisation,” he said.
According to him, the third strategy is about the sales. Compared to selling in trade, the business over the last three years the company has been focusing on retail segment and it has grown in leaps and bounds in terms of the retail segment from a base level of around 600 tonne per month to somewhere around 6,500 tonne per month.