Calcutta, Nov. 7: Balrampur Chini Mills has entered into an agreement with Dhampur Sugar Mills to acquire an integrated sugar unit of the latter at Rauzagaon in Uttar Pradesh. The buyout will cost Balrampur Chini Rs 182 crore.

The sugar unit has a capacity of 7,500 tonnes crushed per day (TCD) and has a 12 MW co-generation power plant. The acquisition of the unit is subject to necessary legal and other approvals.

“The unit is estimated to crush almost 90 lakh quintals of sugarcane for the season 2005-06 and at Rs 17,000 per tonne, it is expected to contribute Rs 60-70 crore to the topline,” said Kishor Shah, chief financial officer of Balrampur Chini Mills Limited.

The unit has been in operation for the last 10 years, he mentioned.

The decision to sell the unit by Dhampur Sugar is part of its corporate restructuring package that includes reduction in debts and cleansing of its balance sheet.

“The acquisition is in line with our growth strategy to focus on integration model of sugar, power and alcohol as we feel that the future of sugar industry lies in this model,” explained Shah.

“We will continue to explore various opportunities to further our growth plans, including both acquisitions and greenfield projects,” added Shah.

“We will finance the acquisition through a mix of debt and internal accruals. We would also part finance it through our GDR issue, while the remaining amount would be used for our ongoing greenfield project,” said Shah.

The company is setting up a greenfield integrated sugar complex at an estimated project cost of Rs 300 crore at Datauli, Mankapur in eastern Uttar Pradesh comprising 7000 tonnes crushed per day (TCD) sugar plant, a 23 MW power plant and a 60 KLPD distillery. The plant would be commissioned by November 2006.

After the acquisition of Rauzagaon unit and commissioning of Mankapur unit in 2006-07, the company will have a crushing capacity of 54,500 TCD.

It has also expanded capacities at its four current manufacturing locations ? Balrampur, Babhnan, Tulsipur and Haidergarh ? by 1000 TCD at each unit. The new season will start with a capacity of 7,000 TCD at the Tulsipur unit, 9,000 TCD at the Bhabnan unit and 12,000 TCD at the Balrampur unit.

The Akbarpur plant, built at a cost of Rs 200 crore, is an integrated complex for manufacturing sugar (7,000 TCD) and co-generation of power (11 MW) through bagasse. The Haidergarh unit, another integrated complex, has a capacity of 5,000 TCD.