Private cos set their sights on Maharashtra co-op sugar fiefdom

PUNE: Competition in Maharashtra .s sugar industry is intensifying as more than 100 applications have been filed for setting up new factories . Maharashtra’s sugar industry is dominated by cooperative mills and they are worried over the possible fight for sugarcane in the near future.

The state sugar commissionerate has issued certificates, the first step to set up a greenfield plant, to 73 mills in the last two years. Another 50 applications are pending. The certificate confirms that there must be a mandatory minimum distance of 15 km between two factories.

State cooperation minister Harshavardhan Patil said recently that more than 100 factories have filed applications to set up greenfield projects in Maharashtra. “We will now have to consider how much expansion of the sugar industry should be allowed and how much more sugar cane can get in future. There should not be an unhealthy competition for cane in the future for which we may have to ask the Centre to raise the distance criterion from 15 km to 25 km,” he added.

“A sugar mill has to run for at least 160 days to be economically viable. If the increase in sugar mill numbers puts pressure on cane availability, then the efficiency of the mills will be affected,” said an official in the sugar commissionerate.

However, all the companies having the certificate may not set up a sugar mill. The companies need to file an industrial entrepreneur’s memorandum with the Union industry ministry and also to deposit `1 crore. An official in the cooperative sugar industry association said that only around 50 companies have taken the second step.

The name of Bajaj Hindusthan, a leading private player in UP, is also being discussed in the list of IEM holders. However, when contacted, the company spokesman said, “We do not want to comment on this”. The new sugar mills will come up at a time when over 30 cooperative sugar mills are likely to be shut in the next two years.

source: indaitimes