Sugar manufacturing company Balrampur Chini Mills Limited is bullish on maintaining its robust double-digit growth due to the conducive environment for higher production of sugar and government’s push for ethanol, a senior company official said.
The rising sugar prices are a reflection of input cost pressure for sugar mills and it will begin to ease by November, Balrampur Chini Mills promoter and Business Lead (New Initiatives), Avantika Saraogi said.
The price rise is, however, far less than the input cost inflation, she said.
“The revenue growth is expected to be between 12 and 15 per cent for the current year and the next year, arising out of better realisations. The growth is expected to be around 10 per cent based on current forecasts,” she told PTI in an interview.
“The better realizations will be due to better utilisation of cumulative crushing assets of 11 crore quintals of sugarcane in 10 manufacturing plants. The other factor is the farm-level modern scientific interventions, which is helping boost yield and realization,” chairman and managing director Vivek Saraogi said.
In 2022-23 the crushing was 1030 crore quintals, up by 16 per cent over 2021-22. In 2020-21 and 2021-22 the realisations were, however, far less as there were severe floods, he said.
Avantika Saraogi is the next generation face of the promoter who has been working with 5.5 lakh farmers on production and quality interventions. The effort has pushed up production, the top official said.
Asked about the El Nino effect, Saraogi said that east Uttar Pradesh is better placed in respect of it.
On the State Advisory Price (SAP) of sugarcane in the upcoming crushing season, Avantika Saraogi said that she does not foresee any major hike in price amid Lok Sabha election next year.
“There was no increase in SAP belore the general election five years ago. The vote bank impact of SAP price is not as high as perceived. There may be, however, a slight increase in the SAP from Rs 350 per quintal for the current season, which is still awaited. The government’s ongoing interventions have already improved the condition of mills and farmers,” she said.
“The 100 per cent E20 target by 2025 has been a game-changer. Ethanol has helped sugar companies to achieve better overall realizations,” Avantika Saraogi said.
E20 is blending of 20 per cent ethanol in petrol for use in vehicles by 2025. This is expected to double the demand for ethanol from 400 crore litres in the current fiscal to 800 crore litres in the next year.
Earlier the government preponed the time from 2030 to 2025 for the change in the ethanol percentage in fuel for vehicles.
On the possible threat to export of sugar due to it, she said that the production of the commodity in the country in the current year will be at least 31 million tonnes post diversion to ethanol production. So there will be enough room for exports.
“Export announcement from the government will come as there will be surplus sugar after fulfilling domestic demand, which is at best 27.5 million tonne. The announcement may be a bit delayed as it will come after the government had ensured enough domestic stock and supply for ethanol, which is its priority,” Avantika Saraogi said.
The company’s standalone revenue from operation was Rs 1389.62 crore in the first quarter of FY 24 on higher volume in sugar and distillery segments coupled with higher realisations. Ethanol revenue now constitutes 30 per cent of its total revenue.