Private sugar factories to make their presence felt

PUNE: The 2011-12 sugarcane crushing season starting from November this year will see 51 private sugar factories mark their presence in Maharashtra's sugar sector, accounting for almost 30 percent of the 4.50 lakh tonne daily crushing capacity of the state, giving stiff competition to the 123 co-operative factories.

"Our conservative estimates put the crushing capacity of private sugar factories at 30 percent but it is expected to increase upto almost 50 percent in the next couple of years," said Anil Bansode, joint director, sugar development in the state sugar commissionerate.

The rapid increase in the number of private sugar factories may subsequently mark a shift in Maharashtra's sugar sector. The sugar sector in the state was once dominated by cooperative sugar factories, floated by politicians who also promoted cooperative dairies, spinning mills and credit societies. However the younger generation of the netas is more inclined to start private sugar factories as they want to prevent factionalism and also have lesser governmental interference.

The statistics of the Maharashtra state federation of cooperative sugar factories has valued the state's sugar sector at Rs 17,000 crore while the industry in the country is worth Rs 40,000 crore.

Bansode said, "With 10 new private sugar factories starting crushing from next season, the total number of private sugar factories in the state will be 51". There are 123 cooperative sugar factories in the state, of which not even ten are profit making. The factories thus face problems like delay in farmers' payment and under utilization of crushing capacity among others.

"On the contrary, private factories not only offer faster services to farmers, but are also active in effectively marketing by-products from sugarcane molasses. With the good alternative income sources, the fluctuating sugar prices do not affect the financial conditions of the private factories", explained an official from the sugar commissionerate.

A significant number of the private factories are either owned or managed by close relatives of politicians, who are currently in the state cabinet or holding key position in government establishments like various corporations. "Private sugar factories started in 1998, when the sugar sector was opened for private sugar factories which offered better returns, higher recovery and speedy payment to the farmers", said B B Thombare, chairman and managing director of Natural Sugar and Allied Industries Private Ltd (N-SAI). It was the first private sugar factory in the state that came up in Ranjani village of Kallam taluka in Osmanabad district.

Amit, the elder son of former chief minister Vilasrao Deshmukh, has set up Jagruti sugar factory in Latur, apart from his existing one private and one cooperative sugar factory in the same district. NCP leader Babanrao Pachpute, who set up Saikrupa private sugar factory in Shrigonda (Ahmednagar), has now set up another factory named Saikrupa-2. BJP leaders Gopinath Munde, Vinod Tawade, Subhash Deshmukh and Nitin Gadkari also have private sugar factories. Tawade controls Shrinath Mhaskoba sugar factory in Pune district whereas Deshmukh controls Lokmangal Agro and has set up another factory in Solapur. The promoter of Purti Sakhar Karkhana Ltd at Umrer (Nagpur) BJP national president Nitin Gadkari, is also coming up with Mahatma Sugar, a private enterprise.

In India, Uttar Pradesh has maximum number of private sugar factories in the country.

source: TOI