BK Birla Group to Set up Distillery for Rs80 Crore to Revive Its Sugar Business

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May 30, 2018

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by Soumonty Kanungo (Live Mint) Jay Shree Tea MD D.P. Maheshwari says the BK Birla Group is looking to process molasses, a by-product from sugar-refining, to produce ethanol — After several failed attempts to sell its sugar business, the BK Birla Group is setting up a distillery at an estimated cost of Rs80 crore to make the unit viable, unfazed by lacklustre performance in the current year.

In 2016, Jay Shree Tea and Industries Ltd, a BK Birla Group firm, spun off its loss-making sugar business, which was acquired in 2010, with the aim of finding a buyer for it. But two years on, the group has decided to invest in the business again.

D.P. Maheshwari, managing director of Jay Shree Tea, said the group is looking to process molasses, a by-product from sugar-refining, to produce ethanol.

The government is looking to scale up blending of ethanol with automotive fuel. As a result, ethanol prices are firming up, Maheshwari said.

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The current price of sugar is less than the cost of production for most companies due to a bumper crop, this person said. And if a unit doesn’t have its own distillery, it may have to throw away the molasses because of a glut, he added.

The government is encouraging all sugar mills to scale up distillation capacity so that they could produce more ethanol.

Though the price of ethanol is regulated, the government has been raising the price. READ MORE

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