16 new distilleries in UP this year
A host of prominent names in India’s alcohol business, including DCM Shriram, Balrampur Chini, Dhampur Sugar, Dalmia Bharat and Rana group are planning to invest in the distillery business in Uttar Pradesh. The move will auger well for both sugar millers and over 45 lakh farmers in Uttar Pradesh. It also resonates with Centre’s push for higher ethanol blending to help keep the sugar inventory under control.
Credit rating agency ICRA opines that high sugar exports for the second sugar season in a row & an increased supply of ethanol for blending with petrol, will improve the operating profitability of integrated sugar mills by 75-100 basis points to 13-14% this fiscal. “Sugar closing stocks are expected to decline to their lowest levels in the past four SSs to 9-9.5 million tonne in SS 2020-21, resulting in lower working capital borrowings. The improvement in profitability and controlled debt levels will, in turn, bolster the credit profiles of integrated mills this fiscal,” it stated.