Balrampur Chini Mills develops plans to boost sugar and ethanol revenue
Balrampur Chini Mills is seeking to revive its sugar cane throughput to increase sugar, ethanol and cogeneration revenues, and expand its distillery operations to increase ethanol’s share in the overall revenue mix. He plans to aggressively change the mix of sugarcane varieties, even as he prepares to grow more profitably.
According to Vivek Saraogi, President and Managing Director of Balrampur Chini, the company’s crushed cane volume increased slightly during the October 2021 to September 2022 sugar season, but the recovery shrunk by 37 basis points due to of a drop in the harvest, due to a substantial increase in rainfall in its two mills. Cane disease in two other factories, on the other hand, had an impact on the recovery. However, the underperformance of cane crushing was made up for by the performance of its distillery division. The company recorded less than 1% growth in revenue and an increase of almost 10% in net profit.
Reduced capital cost per liter
The company intends to revive its sugarcane throughput from a minimum of 87.5 lakh tons to 110 lakh tons, which would help boost sugar, ethanol and cogeneration revenues, thereby increasing the overall scale of operations. He intends to order an expansion of the distillery from the current 560 KLPD (kilo liter per day) to 1050 KLPD in the current financial year.
“The expansion is being commissioned at a lower capital cost per liter than the prevailing greenfield average, indicating that we are not only likely to grow larger, but also more profitable. This will likely increase the proportion of ethanol in our overall revenue mix, from 19% in fiscal year 2021-22, to approximately 35% when ethanol expansion is fully utilized,” Saraogi said in the latest annual report from The Company Report (2021-22).
The company also intends to “aggressively modify” its sugarcane variety mix and is working closely with advanced sugarcane research institutes to introduce premium cane varieties that can help moderate his overreliance on a single variety of cane – C0 238 – which had an increasing incidence of red rot in the last fiscal year.
The two ethanol projects – the 170KLPD distillery expansion at Balrampur, the new 320KLPD greenfield project at Maizapur – are expected to increase installed capacity to 1,050 KLPD by November 2022, making the company arguably the largest ethanol producer in Uttar Pradesh.
The distillery’s 1,050 KLPD capacity will be fully allocated to ethanol production, except for the mandatory production of approximately 7% ENA (extra neutral alcohol) to meet the country’s alcohol needs. It has a ability mix through ethanol made by the B-heavy way and juice. This fungible capacity and flexibility will help the company respond to changing market dynamics to maximize profitability, he said.
Balrampur Chini’s production mix will be influenced by current sugar and ethanol achievements.
“As it stands at the start of FY 2022-23, the company intends to maximize ethanol production through the molasses route (partially sacrificing sugar) and the syrup route (sacrificing all the sugar). In the current state of the strategy, it will only produce the amount of sugar that it can market in India and without creating inventory overlaps (between the sugar of the previous season and the current season)”, a- he declared.