BK BIRLA GROUP PLANS ₹80 CRORE DISTILLERY TO REVIVE SUGAR BIZ

After several failed attempts to sell its sugar business, the BK Birla Group has decided to set up a distillery at an estimated cost of ₹80 crore to make the unit viable.

In 2016, Jay Shree Tea and Industries Ltd, a BK Birla Group subsidiary, had spun off the lossmaking sugar unit, which was acquired in 2010, to find a buyer. But two years on, the group has decided to invest in the business again, despite a lacklustre performance in the current year.

DP Maheshwari, MD of Jay Shree Tea, said the group is looking to process molasses, a by-product from sugar-refining, to produce ethanol. Now that the government is looking to scale up blending of ethanol with automotive fuel, ethanol prices are firming up, said Maheshwari .

The group’s sugar business, now held by a private firm, Majhulia Sugar Industries Pvt. Ltd, has obtained clearances from the environment authorities of Bihar to set up the distillery. Construction will start by the end of 2018, and the unit is expected to be ready by the next sugar season, he said, adding that the bulk of the investment will come from the group’s own reserves.

The group has, however, not given up its search for a buyer, but is working on making it “more viable”, Maheshwari said. The group has so far invested ₹200 crore in the sugar business, including the ₹113 crore it had paid to acquire the unit.

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