Jay Shree to set up ethanol unit, hike power capacity

Jay Shree Tea and Industries would be expanding in the sugar sector in a major way after studying how the group’s first acquisition in that space performs over the next two years, managing director DP Maheswari told DNA on Wednesday.

Before that, Jay Shree plans to raise co-generation power capacity and set up distillery for producing ethanol.

The BK Birla Group company ventured into the sugar space a year back acquiring a Bihar-based sugar mill, MP Chini Industries, for Rs112.50 crore.

“We see a great opportunity in sugar but we want to feel the ground first. This is our first foray in the sugar space and we have not even completed one year. We want to feel the results and get ourselves fully engrained in the working, and then after another 2-3 years we plan to grow,” Maheswari said on the sidelines of an extra-ordinary general meeting of the company.

The acquisition came with a co-generation facility of 6 mw and own sugarcane plantation of around 1,000 acres.
Jay Shree is raising power capacity to 22 mw, which, Maheswari said, may involve a capital outlay of about Rs95 crore.

“For power we have already engaged some consultants, who are now working on it. May be in the next 3-4 months we would have concrete suggestion with us. Then it depends how much time we take to deploy that much money. The investment as a thumb rule would be Rs5-6 crore per megawatt. We would also be exploring whether we can have the coal linkages. All these things need to be worked out,” he said.

The next in the agenda would be ethanol production, but that would happen at a higher capacity level. “Venturing into ethanol would be natural corollary. But you need a minimum level of production which we currently don’t have in our sugar plant. Our mill’s production is not sufficient to warrant a distillery. But that can be thought over,” Maheswari said.

The sugar capacity is now being hiked from 4,600 tonnes crushed a day (tcd) to 5,500 tcd.

“When we took over, the previous owner made 2.7 crore kg of sugar, which this year we increased to 3.83 crore kg and next season starting November we expect to go up to 5 crore kg,” Maheswari said.