Mumbai: Balrampur Chini Mills Ltd, India’s second-biggest sugar producer, expects to boost production by 30% next year as the company adds crushing capacity.
Production may reach 1.2 million tonnes (mt) in the year beginning 1 October
from 920,000 tonnes this year, said managing director Vivek Saraogi in a phone interview from Kolkata.
Topping up:The company’s crushing capacity will reach 73,000 tonnes a day after its new mill in Uttar Pradesh starts next month.
Balrampur’s crushing capacity will reach 73,000 tonnes a day after a new mill in Uttar Pradesh starts next month.
Higher production may not help the company reverse a slide in profit because white sugar prices in London is trading near a two-year low amid a global glut of the sweetener. The company and its bigger rival Bajaj Hindusthan Ltd are among the worst-performing shares on India’s BSE-200 index in the past year.
“There’s no good news on the horizon as far as prices are concerned,” Saraogi said. “There’s a supply overhang in the global market.”
Refined, or white, sugar for October delivery fell $1.9 (Rs76.76), or 0.7%, to $267.60 a tonne as of 11:57 am on London’s Liffe exchange. Sugar fell to $270.7 a tonne on 10 September, the lowest in more than two years. Global sugar surplus may increase 17% in the year from 1 October to 14 mt, led by India, Brazil and Thailand, the world’s leading producers, according to ED&F Man Holdings Ltd., the largest trader of the sweetener. India will surpass Brazil to become the world’s top producer, according to the International Sugar Organization.
Balrampur had a loss of Rs473 million ($12 million) in the quarter ended June, and earnings slumped 75% to Rs200 million in the previous three months ended 31March The stock has dropped by a third in the past year, compared with a 34% gain in the BSE-200 index in the period.
The company’s shares fell 0.6% to Rs65.15 at the 3:30 pm close on the Bombay Stock Exchange.