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REPORT ON
"INDIAN SUGAR INDUSTRY IN STRESSFUL CONDITIONS
AND THE WAY FORWARD"

Nandini Consultancy Centre has released an investigative report on performance of Indian sugar industry and the needed measures to take it forward.
The report released in the month of April, 2017 is now available for sale.

For placing order, please contact,
Nandini Consultancy Centre, India.
Tel: +91-44-43540719, 43511945, 24916037
Email: nsvenkatchennai@gmail.com

Nandini Consultancy carried out detailed study on the basis of extensive study and primary research all over India and have highlighted the various challenges faced by the sugar industry and have laid down firm recommendations for the way forward .

Contents of the report
  • Overview of Indian sugar industry
  • Critical analysis of financial performance of Indian sugar industry in recent period
  • Missing links in government policies and needed corrective steps
  • Recommendations on technology and management strategies for sugar mills and cane farming community to forge ahead
  • Diversification project opportunities for sustained profitability
  • (Profiles on twelve projects based on molasses, ethanol, bagasse and cane trash that have vibrant demand potentials and investment opportunities in India)
  • SWOT analysis
  • Way forward

Number of pages 210

Authors

  • Mr. Swaminathan Venkataraman is a Chemical Engineer and MBA from Indian Institute of Management, Ahmedabad (IIMA). Mr. Swaminathan Venkataraman is Director of Nandini Consultancy (S) Pte Ltd., Singapore.
  • Ms.K. Sangita Gayatri is a chemical engineer and senior executive in Nandini Consultancy Centre

Highlights of the report are given below:

Background details :

Indian sugar industry has been experiencing stressful conditions over the last several years due to fluctuation in weather conditions and consequently affecting the production of sugar cane, lack of consistency in the central and state government's policies and changing price trend of sugar in Indian and global market . The issues faced by the sugar industry are well reflected by the fact that thousands of sugar cane farmers have not been paid by the sugar industry for the procurement of sugar cane and the arrear amount now run to several thousand million rupees, which is causing social stress.

Considering the fact that India is the second largest producer of sugar cane/sugar in the world after Brazil and Indian sugar industry is intimately linked to the fortunes of millions of sugar cane farmers all over India , it is a matter of urgent necessity that the economics of Indian sugar industry should be stabilized by appropriate policies and the programme initiatives, not only by the Central and state governments in India but also by all stake holders including sugar mills, sugar cane farmers and research institutions.

It is necessary that the governments and stake holders should co ordinate the strategies and work in unison, so that the health of the Indian sugar industry would be protected and industry would forge ahead for the larger good of the country.

Observations :

Obviously, the Indian sugar mills are unable to generate adequate profit in their operations, which is the root cause for the problems. It is seen that the stand alone sugar mills are more vulnerable to loss, compared to the sugar mills that have facilities for co generation of power and production of ethanol from cane molasses.

Urgent steps and strategies are required to maximize the profit , which would be possible by implementing diversification projects and optimizing efficiency in the shop floor practices and improving the sugar recovery rate from the sugarcane.

Further, lack of consistency in government policies have become key challenge for the sugar sector.

While there are constraints due to various issues, still there are many possibilities for the stake holders in the sugar industry to optimize the performance, which has not been done adequately well. The sugar industry now needs leadership more dynamic than what it has seen so far.

Indian sugar industry is in desperate search for new techniques and engineering practices that would result in greater sugar recovery from cane, optimum utilization of feedstock and energy resources and water management. Government of India has been offering liberal support and assistance to institutions and individuals carrying out Research & Development ( R & D) pursuits. However ,the R& D achievements are nowhere near the required level.

The interests of the cane farmers as well as the sugar mills in the prosperity of the sugar industry as a whole are same and identical. Therefore, sugar mills should not view the fortunes of cane farmers differently from its own. As a senior partner of the sugar family, sugar mills have to take care of the interests of the sugarcane farmers, without whose support and cooperation sugar industries cannot survive.

Recommendations :

Sugarcane pricing policy -There is need for uniform formula for fixation of State Administered Price (SAP) by all state governments to avoid arbitrary and inconsistent decisions.

Licensing policy - Government should insist on minimum economic capacity and optimum operating parameters for new sugar mills and expansion of existing ones

Efficiency codes : Government should fix norms for utilization of feedstock and utilities for the sugar mills and provide the industry with efficiency codes to help the investors / financing institutions in rating performance

Water conservation : Sugar cane farmers should be encouraged to resort to micro irrigation for optimizing use of water, ,utilizing the supportive schemes of government.

Government should permit sugar cane farmers to collect free of charge silt / sand from the nearby lakes and ponds for sale or use, subject to the government regulation .The silt can be used as organic manure in sugar cane farms and the sand can be used for construction purposes. This would increase water holding capacity in ponds and lakes to conserve water and benefit the farmers by providing additional source of income .

Ethanol blending - Sugar mills should be allowed to blend ethanol, that they may produce from sugar cane molasses with petrol and market the blended petrol directly. This would help in increasing their income and profitability.

Cogeneration projects : All sugar mills should be compelled to have cogeneration projects for generation of power

Movement of molasses / power : All state governments should remove all inter state restrictions on movement of molasses and on sale destination for power generated by sugar mills in the co generation plants.

Cane area reservation :Government should give up the policy in toto regarding cane area reservation and minimum distance criterion for sale of sugar cane to sugar mills

Diversification projects : Government should encourage sugar mills to go for diversification projects in related fields by initiating appropriate policy measures.

Sugar mills should have value addition projects based on molasses, ethanol and bagasse by implementing appropriate diversification projects. Several sugar mills and other industries involved in related activities should examine feasibility of collaboration for implementation of such diversification projects in joint venture. This would enable setting up globally competitive large capacity plants.

Export target for sugar : Government should fix export target of minimum two million tonne per annum in all years, to ensure that the interest of the export market would be protected. Government should also set up dedicated Sugar Export Corporation .

Import duty : Government should evolve a formula to fix import duty from time to time based on various conditions, to avoid giving an impression that the import duty is fixed in arbitrary manner without much study as knee jerk reaction to the developing scenario.

R & D thrust : There should be investment in R & D with coordinated efforts of sugar mills, engineering organizations and agri research centres under one roof in different regions, to launch Sustainable Sugarcane Initiatives and optimize the design and operating parameters of sugar mills in tune with the global standards.

Beet sugar cultivation : It is necessary to initiate urgent efforts for the standardization of techniques for cultivation of beet sugar and promotion of use of beet sugar as feedstock by sugar mills, to improve the capacity utilization of sugar mills, which now suffer often due to non availability of adequate sugar cane for processing. The requirement of water for beet sugar cultivation would be less than that of sugar cane and cultivation cycle of beet sugar would be less than that of sugar cane.

Inter cropping in sugar farm : The sugar cane cultivators should be encouraged to examine the feasibility of intercropping in sugarcane cultivation to optimize agricultural productivity and improve returns for the farmers.

Recommended diversification projects : Twelve diversification projects have been recommended for implementation by sugar mills. The suggested diversification projects are based on cane molasses, ethanol, bagasse and sugar cane trash. On each of the project, broad data have been indicated regarding the Indian demand supply scenario, import export level, process outline, global trends, SWOT analysis and recommendation.

Published by

Nandini Consultancy Centre Pvt. Ltd


M-60/1, IV Cross Street, Besant Nagar, Chennai-600 090, India.
Contact Number: 044-24916037.
nsvenkatchennai@gmail.com
www.nandinichemical.com

Price: Rs. 3000/- per copy