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CHAPTER PROFILE

This is to understand the backdrop of sugar manufacturing units

located in the state of Andhra Pradesh. As the study is with a specific

reference to the four sugar manufacturing units in the two potential

districts of the state, this chapter gives a comprehensive focus on the

location, genesis, operational, organizational, financial and human

resource aspects of the respective units under study for a better insight.

SUGAR MANUFACTURING UNITS IN KRISHNA DISTRICT

UNIT-1: THE KCP SUGARS LIMITED. [

HISTORY OF THE COMPANY

Late Shri. Adusumilli Gopalakrishnaiah, who hailed from

Gudivada, is pioneer in setting up the Cooperative sugar factory of 600

TCD as early as in 1936 in Vuyyuru under cooperative sector. But Late

Shri. Velagapudi Rama Krishna .,ICS, a top bureaucrat and civil servant

had conceived the idea of promoting agro based industries, when he is

Director of Industries, Madras state. By virtue of his position as Director

of Industries, he had exposure to the industrial sector which prompted

him to take over the sugar industry on 03.07. 1941, at Vuyyuru which is

not doing well. The sugar factory is of 600 TCD and it is christened as

The KCP Ltd. He is source of inspiration to many entrepreneurs to set up

sugar industries in Andhra Pradesh. Some of them are Andhra Sugars,

Sarwaraya Sugars and Deccan Sugars. The KCP Ltd never looked back

from the year 1941 and gradually by stages it had expanded to 7500

TCD which is the present capacity. The KCP Ltd., consequent to

diversified operations has, over the years become a conglomerate with

multi-locational and multi product units, each the size of an independent

company. The company has envisaged plans to set up different projects

 

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which required focused attention and substantial resources. Therefore it

has been decided to reorganize the company The KCP Ltd., into two

companies. With this objective a new company, under the name and

style of the KCP Sugar and Industries Corporation Ltd., has been

incorporated in the year 1996 with the following units 1). Sugar Units at

Vuyyuru and Lakshmipuram 2). Co-Gen unit at Vuyyuru and

Lakshmipuram 3). R&D, Distillery, Co2, Bio fertilizers and Calcium

located plant at Vuyyuru. 4). Workshop Unit at Tada.

ENTREPRENEUR’S PROFILE

Late Shri. V.M. Rao a visionary had taken over the reigns of the

KCP Sugar and Industries Corporation Ltd., as the first Chairman and

Managing Director. He is instrumental in revamping the company with

his foresight by introducing technological innovations and right sizing

the man power for increasing the production and productivity in the

organization. He took several bold steps to start allied products like Bio-

Products, Acetic Acid and several other projects viz. Co-Gen, Calcium

Lactate, Bio-Fertilizers, Ethanol and Mycorrhiza.

The legacy of late Shri.V.Ramakrishna and Late Shri.V.M. Rao is

being arduously continued by Smt. Irm Guard Velapudi V.M. Rao

Managing Director and Smt. Kiran Rao. Executive Director. Smt. Kiran

Rao is an ardent lover of nature and animal lover who propagates the

compassion and care with which one has to take care and preserve the

ecology which is passed on as a gift to the future generations. She is

successful woman entrepreneur having started her own business

enterprises before taking over stewardship of the company as executive

director. Shri. Vinod Sethi Chairman is with his vast experience is

making endeavor to take KCP Sugars into multi dimensional

conglomerate with the objective Growth with a purpose. the KCP Sugar

and Industries Corporation Ltd., is all through with their continued

 

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unrelenting efforts of all the three stewards to excel the predominant and

eminent position enjoyed over years among share holders and business

associates.

[

IMPORTANT EVENTS OF COMPANY

In 1995 The company is incorporated and the manufacturing

operations are considered only for One day. 1996-The 'Scheme of

Arrangement' entered between the Company and 'The KCP Ltd' was

approved by the Hon'ble High Court of Madras vide their order dated 18th

March, whereby the following units of 'The KCP Limited' stands

transferred and vested in the company from the Effective Date viz.,1st

April. One equity share in the Company of `10/- each credited as fully

paid up for every two equity shares of ` 10/- each fully paid up held by

such members in The K.C.P. Ltd., and all the Shareholders in The K.C.P.

Ltd., will be issued share certificates in the Company. On completion of

the related formalities, the said shares of the company will be listed on

the Chennai and Hyderabad Stock Exchanges.

Shri. V.M. Rao, Chief Promoter Director of the Company has been

appointed as the Chairman and Managing Director for a period of five

years from 2nd April, 1996 to 1st April, 2001 on a remuneration which is

within the limits of Schedule II of the Companies Act, 1956. The

Company is setting up a Bio technology Institute at Vuyyuru for

increasing the yield in sugarcane. The first Directors of the Company

Shri. V.M. Rao, Smt. V.P. Durgamba and Smt. Rajeswary Ramakrishnan

retire at the ensuing Annual General Meeting in terms of Article 119 of

the Articles of Association of the Company and being. Eligible offer them

for reappointment. In 1997The Board of Directors also wishes to inform

that the Company has entered into separate Memorandum of

Understanding with Central Electronics Engineering Research Institute

 

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(CEERI), Pilani, Indian Institute of Science, Bangalore and National

Remote Sensing Agency, Hyderabad for various R & D activities.

The Company issued/allotted the shares pursuant to the Scheme

of Arrangement approved by the Hon'ble High Court of Madras on 18th

August 1996 and share certificates are being issued to the Shareholders

who have surrendered the old certificates to 'The KCP Ltd'. The fully

owned Subsidiary 'The Eimco-KCP Ltd' was awarded 'ISO 9001' in

February, by Lloyds Registrar Quality Assurance for design, manufacture

and service of chemical process equipment covering solid liquid

separation technology.

During the period under review, the Company has introduced

'Voluntary Retirement Scheme' at Vuyyuru and 50 employees have opted

for the same as on 31.03.97, towards which an amount of ` 55.61 lakhs

has been expended by the Company.

The Industrial relations, though quite congenial is affected on

account of a strike called by a section of the workers on 27th March,

which ended on 6th April, '97. The strike did not disrupt manufacturing

operations as the Company is able to effectively maintain the same level

of production with Support from the loyal employees. In 1999 The

Company is exploring various avenues for venturing into downstream by

products and further consolidation in the acetic acid and alcohol units.

During the year under review, the Company has promoted a

Subsidiary Company, KCP Sugars Agricultural Research Farms Private

Limited, primarily aimed at extensively carrying out research and

development programmes on sugarcane and other agricultural produce.

In 2000 Ms. V. R. Durgamba, Director has resigned and Ms. Irmgard

Velagapudi has been co-opted as a director on the board. The Equity

Share Capital of the Company stood at ` 12, 89, 30,160 and the Reserves

 

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and Surplus stood at ` 61, 05, 68,115/- as at 31st March. The Company

has completed the installation of the high pressure boilers and

automation of some of the processes at both the Units. In the coming

year, expansion in the capacity of acetic acid unit from 3300 tpd to

12500 tpd; setting up of a new industrial alcohol plant of 10000 kl, in

addition to setting up of1 MW power plant from biogas are expected to be

completed.

160  

Chart No. 5.1 : Organization Chart – The KCP Sugars and Industrial Corporation Ltd.

161  

ORGANISATIONAL STRUCTURE OF THE KCP SUGARS & IC LTD.

An organisation is something, which affects everyone especially in

the industrialized, urbanized society of today. In the words of Money and

Return Organisation is the form of every human association for the

attainment of a common purpose. Organisations whether big or small

private or public are the only instruments available to overcome the

biological and psychological limitations. Individual create various types of

strategies to fulfill their needs and to achieve their goals. Sound

organizational structure permits optimum use of technical and human

resources through specialization. Right persons are placed at right

position on the basis of their knowledge and experience. It develops

people by creating appropriate training and promotional productivity

opportunities. According to Richard II Hall, organizations increase

productivity through better understanding of human behaviors in an

organizational setting. The KCP sugars and IC Ltd., organization is

divided into the following departments’ i.e., Agriculture department,

Human resource and development department, Engineering department,

Process department, Finance department, Civil department, Transport

department, Electrical department, Computers department, Sales

department and Purchase department.

INDUSTRIAL CHEMICALS / COGENERATION / OTHER UNITS

Vuyyuru Distillery Unit produced 35.94 lakh litres during the

year ended 31.03.2010 as against 64.03 lakh litres during the previous

financial year. As against this, they said unit sold 28.63 lakh litres

valued at ` 9.29 crores during the year under review as against 48.05

lakh litres valued at ` 12.40 crores during the previous year. The Bio-

fertilizer unit at Vuyyuru sold about 1.59 lakh Qtls valued at ` 2.99

crores as against 1.59 lakh qtls valued at ` 3.50 crores during the

 

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previous year. Efforts are on to increase the quantum of sales in the

coming years. Cogeneration Unit at Vuyyuru produced 25,174 MW of

power during the financial year under review as against 14,605 MW in

the previous year, and the Lakshmipuram Unit produced 3,653 MW of

power as against 3,113MW in the previous year. In all, total export of

electrical energy was 11,479 MW resulting in a turnover of ` 3.25 crores

as against 994 MW at a turnover of ` 0.29 crores during the previous

year. The Carbondioxide and Calcium Lactate plants together

contributed ` 0.95 crores towards its turnover of the Company as against

a turnover of ` 0.96 crores during the previous year.

TABLE-5.1: HUMAN RESOURCE STRENGTH OF THE KCP SUGARS AND IC LTD., AS ON 31.03.2010

(Figures in no’s) S.NO Category(grade) Permanent Seasonal Trainees Contract

App. Daily App.

Daily total

1

2

3

4

5

6

7

8

9

10

11

12

13

Officers

Supervisors-A

Supervisors-B

Supervisors-C

Clerk-A

Clerk-B

Clerk-C

Highly skilled

Skilled-A

Skilled-B

Semi-skilled

Un-skilled

Trainees and App

25(100.0)

26(100.0)

15(88.23)

20(76.92)

10(90.90)

42(67.74)

15(45.45)

17(89.47)

80(95.23)

82(73.21)

133(67.17)

55(36.91) -

- -

2(11.76)

6(23.07)

1(9.0)

20(32.25)

18(54.54)

2(10.52)

4(4.76)

30(26.78)

65(32.82)

77(51.67) -

- - - - - - - - - - - -

150(56.39)

- - - - - - - - - - - -

42(15.78)

- - - - - - - - - - -

17(11.40)

74(27.81)

25(100.0) (2.43)

26(100.0) (2.52)

17(100.0) (1.65)

26(100.0) (2.52)

11(100.0) (1.07)

62(100.0) (6.03)

33(100.0) (3.21)

19(100.0) (1.84)

84(100.0) (8.17)

112(100.0) (10.89)

198(100.0) (19.26)

149(100.0) (14.49)

266(100.0) (25.87)

Total 520(50.58) 225(21.88) 150(14.59) 42(4.08) 91(8.85) 1028(100.0) Note: Figures in the brackets indicate the percentages to respective total. Source: Office Records of the KCP Sugars and IC Ltd.

 

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HUMAN RESOURCES

The Company has 1028 employees including non-seasonal

employees at the sugar units as on 31.03.2010. The Company ensures

high standards of safety for its employees and periodically conducts

meetings to minimize operational hazards. The Company believes that

people are the key to success and hence the human resources function

pro-actively develops innovative and business focused methods to

attract, motivate, develop and retain talented, competitive manpower

sourcest as can be viewed from table-5.1.

PERSONNEL AND INDUSTRIAL RELATIONS

The Employee relations scenario continued to be harmonious and

congenial. Acknowledging this, your Company has been awarded for

outstanding efforts in maintaining cordial Industrial Relations and

Labour Welfare by Government of Andhra Pradesh.

CORPORATE OBJECTIVE

a) To become the preferred employer of personnel by offering highest

quality of work life in the industry

b) To be the most outstanding supplier in the industry by meeting

customer expectations

c) To be first among locations in the company in ‘earnings per

employee’ ratio in the industry during the present decade.

d) To achieve at least 10% growth every year in turn over, profits and

value addition.

e) Implement measures to ensure minimum losses, maximum quality

and parameters be achieved.

 

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f) The company committed to make continuous efforts to upgrade

our manufacturing techniques, continually improve effectiveness of

our quality management system and enhance performance of

employees by providing need based training and motivating them

to work as a team.

CHART-5.2: PROCESS OF PRODUCTI0N

Source: Office Records of the KCP Sugars and Industries Corporation Ltd.

 

165  

SUGAR MANUFACTURING PROCESS

Procurement of Sugarcane from the registered areas through Zonal

Offices. Weighment of Sugarcane in the Weigh Bridge. Feeding of

sugarcane in the Cane Carrier. Preparation of Sugarcane into fine fibers

through leveler units. Feeding of prepared Sugarcane into the mills.

Extraction of 72% of Juice from the prepared Sugarcane in the first mill.

Juice Imbibitions to extract maximum juice in the remaining Fibers.

Juice is taken for boiling purpose. Excess bagasse is sold. The Juice

extracted from the Mills is measured. Treating of Juice in the Juice

heaters. Addition of liquid lime and sulphur-di-oxide in juice Sulphitor.

Separation of Clear Juice and muddy juice in the clarifier. Clear Juice is

sent for evaporation in the semi-kestners and Evaporators. Extraction of

juice from muddy residue through Vacuum Filters. The extraction juice

is reduced into Syrup after evaporation of water particles Addition of

Sulphur-di-oxide to the syrup in order to improve the colour of the sugar.

Syrup is sent to pans for massecuite boiling. Production of massecuites

by adding of various types of molasses and syrup. Preparation of A, B &

C massecuite. A massecuite is improved from B massecuite. B

massecuite is improved from C massecuite. Separation of C massecuite

into C Seed and Final Molasses in the centrifugals. Separation of B

massecuite into B heavy and B Seed in the centrifugals. Separation of A

massecuite into Whiter Crystal sugar and a heavy and a light in the

Centrifugals. The White crystal sugar is dried in the Sugar Hoppers.

White crystal sugar is graded in the Graders. The non-uniform size sugar

is sent for melting. Graded White Crystal Sugar is sent for weighment

and bagging. Graded White Crystal Sugar is sent to sugar godown for

stacking. Sale of sugar is based on the allotment given by the

Government of India.

 

166  

TABLE-5.2: PRODUCTS PRODUCED BY THE KCP SUGARS AND IC LIMITED.

Station Name of the product Units Installed capacity

Vuyyuru unit

Lakshmipuram unit

Sugar

Molasses-by product

Industrial alcohol /anhydrous alcohol

Bio fertilizer

Electrical power

Incidental co-

generation power plant

Sugar

Electrical power Incidental co-

generation power plant

Qtls

MT’s

BL per day

Qtls

Kwh

Qtls

Kwh

7,500

(tonnes of cane crushed per day)

50,000

15MW

4,000

5MW

Source: Office Records of the KCP Sugars and IC Ltd.

PRODUCT MIX OF THE COMPANY

Table-5.2 presents the different products produced by the KCP

Sugars and IC Ltd., sugar is the main product and remaining is by

products. Consequent to the commitment made by the Company to the

farmers in supporting them to produce profitable crop, the Company has

worked on promoting bio-fertilizer, organic manure, Micxorrhiza, etc. The

following bio-fertilizers are produced and made available to the farmers:

Nitrogen fixing bio-fertilizers, Azospirillu, Azotobacter Phosphate, Bio-

fertilizer Bacillus, Megaterium Mycorrhiza-VAM (Versculor Arbinsular

Solubilizing Mycorrhiza), Aqua Bio-fertilizer, Nitrosomonas and

Nitrobachor for Aqua culture, Bio control Agents for Pest Control,

Trichogramma chiloris, Chilocorus nigritus.

 

167  

SUGAR PLANTS

Vuyyuru

This sugar unit is established at Vuyyuru in the year 1941 with a

crushing capacity of 600 TCD. The present crushing capacity is 8500

TCD and this is one of the largest sugar factories in the country and also

one among the most modern. A State of Art Technology is being

continuously tried and incorporated in the plant.

There is a Distillery plant at Vuyyuru Sugar Factory with a capacity

of 50 KLPD, upgraded from 25 KLPD. The plant has been designed to

produce bio-ethanol to fall in line with the government’s policy and to

meet the target to reduce the import of crude oil and save foreign

exchange. The sugar unit at Vuyyuru has a cogeneration plant also to

produce 15 MW of power per day.

Lakshmipuram

This Unit is one among the most modern plants with a crushing

capacity of 4500 TCD. It has a Cogeneration power plant with 5 MW

capacities, which has been in operation since January 2006.

PROGRAMME OF EXPANSION

The KCP sugars & IC ltd., had taken up steps for technology up

graduation for improvement of productivity and equality of sugar factory

at Vuyyuru. By 1932-41, the cane area is 1880 acres with a production

of 39.25 tonnes of cane. The higher realization per acre from sugar cane

crop greatly motivated the extension in 1951 from 800 TCD to 1,200

TCD, utilized almost the entire quantity of sugarcane and this was

further raised to 2,500 TCD in 1956, all within a span of six years. The

 

168  

sugarcane area increased to over 11,000 acres and the factory utilized

3.23lakh tonnes of cane in 1956-57. The cultivators readily increased the

area under sugarcane crop with every successive expansion, since per

acre income is better than alternative crop.

In 1969-70, the sugar factory through another substantial

expansion of 3,750 tonnes of cane crushing capacity per day to utilize

4.98 lakh tones of cane per season from then on by various

improvements of the plant and machinery, in the year 2010, capacity of

crane crushing was doubled as 8500 TCD. The factory has been rapidly

increasing its annual capacity. The annual average growth rate of cane

crushing from 1941 to 2010 was 3.48 per cent.

TABLE-5.3:- ZONE WISE NUMBER OF VILLAGES AND ACRES

Source: Agriculture department, the KCP Sugar & IC Ltd.

Zone No. of villages No. of acres

1 29(17.0) 2748.45(10.87)

2 31(18.23) 4113.50(16.28)

3 27(15.88) 3081.64(12.19)

4 11(6.47) 3762.30(14.89)

5 19(11.1) 5635.23(22.30)

6 14(8.23) 2713.53(10.74)

7 39(22.94) 3210.61(12.70)

Total 170(100.0) 25265.26(100.0)

 

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TRANSPORTATION OF SUGARCANE

Previously, the sugarcane used to the transported mainly by carts.

But, now due to a large area of nearly 60 miles radius, most of the cane

is being transported by lorries and tractors. The communication

channels are mainly between Vijayawada and Machilipatnam. This

factory installed crushes capacity is 7500 TCD. Total land under

sugarcane cultivation is 25265.26 acres and this is divided into 7 zones.

The factory used 0.34 lakh tonnes of cane in the year 1941, 2.12

lakh tonnes in 1952 and afterwards it increased to 10 lakh tonnes per

annum. Sugarcane is supplied from nearly 171 villages with radius of 50

Kms, of the factory that almost of the total per cent of sugarcane

supplied to the factory comes from 74 villages which are situated

between 11 to 20 Kms. This indicates that the factory has dependable

source of supply at the relatively close range as can be viewed from

table 5.3.

 

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TABLE-5.4: SEASON WISE CANE CRUSHED, SUGAR BAGGED AND RECOVERY OF THE KCP SUGARS & IC LTD.,

DURING 2000-01 TO 2009-10

Year Cane crushed (lakhs MTLS)

Annual growth rate

Sugar production

(lakhs QTLS)

Annual growth rate

Sugar recovery

(%) 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 CARG

6,09,355 6,88,821 9,74,932 10,14,597 9,97,945 10,72,145 12,21,209 8,46,674 5,38,686 4,89,522

-2.16

- 13.04 41.53 4.06 -1.64 7.43 13.90 -30.66 -36.37 -9.12

6,31,820 7,22,284 9,81030

10,60,812 11,44,442 11,97,470 13,19,880 9,19,000 5,62,758 4,64,936

-3.02

- 14.31 35.82 8.13 7.88 4.63 10.22 -30.37 -38.76 -17.38

10.38 10.48 10.07 10.47 11.46 11.15 10.83 10.85 10.45 9.50

Source: Annual Reports and Office Records of the KCP Sugar & IC Limited.

 

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TABLE-5.5: PROFIT PERFORMANCE OF THE KCP SUGARS & IC LTD., DURING 2000-01 TO 2009-10

(` in lakh)

Year Sales

Net profit after taxes(` in lakh)

Annual Growth

Rate

Net profit margin( %)

2000-01

2001-02

2002-03

2003-04

2004-05

2005-06

2006-07

2007-08

2008-09

2009-10

CARG

3140.48

39821.32

36376.12

25035.49

31049.48

40714.44

39724.59

30997.71

25035.49

30155.72

-0.48

4075.21

2547.01

1847.09

2034.75

4,065.21

5711.04

2355.05

7109.68

1132.73

2374.48

-8.57

-

-37.34

-27.48

-43.97

99.78

40.48

-58.00

201.89

-84.06

109.62

13.25

6.39

5.07

8.12

13.09

14.02

5.92

22.93

4.52

7.87

Source: Annual Reports and Office Records of the KCP sugars & IC Ltd.

 

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OPERATIONS OF THE KCP SUGARS & IC LTD.

The operational scenario of the KCP sugars & IC Ltd., during 2000-

01 to 2009-10 is presented in table-5.4. It is evident from the table that

the cane crushed which was 6, 09,355 lakh MTLS during 2000-01

reached the peak of 12,21,209 lakh MLTS during 2006-07 stood at

4,89,522 lakh MLTS during 2009-10. The annual growth rate of cane

crushed is very high during 2002-03, is 41.53 per cent and in the year

2009-10 is -9.12 per cent. Compound annual rate of growth during last

ten years was -2.16 per cent. The production of sugar which is 6, 31,820

lakh QTLS during 2000-01, also reached the height of 13, 19,880 during

2006-07 QTLS and stood at 4, 64,936 QTLS during 2009-10. The annual

growth rate of sugar production among the last ten years the present

year during 2009-10 is -17.38 per cent. High at 10.44 per cent during

2002-03, least at –38.76 per cent during 2008-09. The compound annual

rate of growth from the last ten years of sugar production is -3.02 per

cent. The sugar recovery during the period under review maintained,

more or less, at a consistent rate. The recovery rate ranged between

10.38 per cent (2000-01) and 9.50 per cent (2009-10). This table reveals

that there are fluctuations in the sugarcane crushing from year to year.

The major reason is that since, it is an agricultural product the climatic

conditions drastically affect the yield.

The recovery percentage of sugar is stable during this period. The

production trend of sugar is extremely irregular. Thus the performance

in terms of area, cane crushed in recovery percentage has shown a

steady improvement.

 

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PROFIT PERFORMANCE OF THE KCP SUGARS & IC LTD.

Table 5.5 reveals the profit performance of the KCP sugars & IC

Ltd., interms of sales and NPAT during 2000-01 to 2009-10. It shows the

sales, net profit after taxes. Regarding the sales, company maintain

consistently during the last ten years, during 2000-01 sales is `

31040.48 lakh. Highest sales during the period are ` 40714.44 lakh

during 2005-06, the present year sales is ` 30155.72 lakh. The

compound annual rate of growth is -0.48 per cent. During 2005-06 net

profit after taxes is high at ` 5711.04 lakh, stood at 2374.48 during

2009-10, compound annual growth rate is of net profit after taxes is -

8.57 per cent. Net profit margin is fluctuations the year by year, during

2005-06, ` 14.02 lakh is highest net margin, present year is ` 7.87 lakh.

TABLE-5.6:-FINANCIAL PFRFORMANCE OF THE KCP SUGARS & IC LTD., DURING 2000-01 TO 2009-10

(` in lakh)

Year Share capital Reserves& Surplus

Profit after Tax

Dividend %

2000-01 1133.85 6772.82 1368.16 25 2001-02 1133.85 5384.94 340.19 25 2002-03 1133.85 4962.81 -422.13 -- 2003-04 1133.85 6554.81 1911.78 25 2004-05 1133.85 9012.45 4065.21 100 2005-06 1133.85 12784.19 5711.04 150 2006-07 1133.85 14475.97 2355.05 50 2007-08 1133.85 14342.19 710968. 50 2008-09 1133.85 14546.49 1132.73 70 2009-10 1133.85 15925.95 2374.48 75

Source: Annual Reports and Office Records of the KCP sugars & IC Ltd.

 

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FINANCIAL PROFILE

The achievements of the company can be judged from its financial

performance, it can be seen in the table-5.6. The company is with an

equity share capital of ` 7 lakh in 1943. By 2009-10 its share capital is

` 1133.85 lakh and Reserves and Surplus stood at ` 15925.95 lakh. The

contribution of the company to the exchequer by way of central and state

excise duties collected on Sugar, Alcohol etc., Dividends are maintained

at a level of 50% for the past 5 years.

The factory contributes to the exchequer by paying different taxes

like excise duty, purchase tax and income tax. The amount is more or

less 20% of total sales of the firm. This implies that the firm helps in

national development. Excise duty is the primary income source of the

Indian government. It implies that the sugar industry is essential for the

smooth running of Indian Economy.

TABLE-5.7: YEAR-WISE CRUSHING CAPACITY OF KCP SUGARS & IC LTD., DURING 1941-2010

YEAR Licensed/Installed Crushing capacity per day

1941 800 TCD 1951 1200 TCD 1956 2500 TCD 1969 3750 TCD 1977 6000 TCD 2003 6000 TCD 2004 7500 TCD 2008 7500 TCD 2009 7500 TCD 2010 8500 TCD

CARG (1941-2010) 3.48 per cent.

Note: TCD= Tonnes Crushed per Day Source: Annual reports of the KCP Sugar & IC Ltd.

 

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YEAR-WISE CRUSHING CAPACITY

Table 5.7 presents the year-wise crushing capacity of the KCP

sugars & IC Ltd., at initially 1941 the crushing capacity per day is only

800 tonnes this is tremendously increased to 8500 tonnes per day in the

year 2010 with the compound annual rate of growth 3.48 per cent. This

indicates the progress of the company particularly in crushing capacity.

WELFARE FACILITIES

Free Medical Aid provided to both permanent and seasonal

employees and their dependents in the company's dispensary. All the

employees and their spouses have been covered under Group Medical

policy, Management pays the premium, which may cost around ` 13 lakh

per year. Group personal accident policy introduced and covers all the

employees and accordingly to the company bares part of the medical

expenses and to meet the salary of insured person during the period of

hospitalization in the event of accident while on duty or outside the

factory premises, and consequent treatment in the hospital. Group

Insurance scheme is live for employee's deposit linked insurance scheme

with accident benefit to an extent of ` 25,000/- Loan facilities are being

provided to the non-management staff. ` 1000/- and ` 1500/- to the

Management staff for rather higher studies and who have completed the

course with in the stipulated time they said loan will be waived off. Two

pairs of uniform, one pair of shoes and two pairs of socks provided to all

the employees once in a year. Birthday greetings are being presented to

all the employees on their Birthdays Marriage gift cheque worth of ` 5,

000/- will be presented to the employees and ` 2000/- in case of

employee's children. A lump sum amount of ` 25000/- given to the

 

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Permanent employees and ` 1500/- to seasonal employees as festival

advance. June/July every year to meet their children's education

allowances and the same will be recovered in 8 installments on free of

interest. Free accommodation is offered to almost all the employees in

the company's Quarters. Employees who underwent Vasectomy

operation are granted for 6 days leave as special case. Free supply of 20

electrical units who residing in 'D' type quarters, 24 hours of water

supply and provision of power generator during power cutting time in the

colony. Cable connection has been provided for 450 quarters. Sports and

Games are conducting on the eve of Independence Day celebrations every

year to the employees, spouses and their children separately and

mementos will be presented on Independence Day. Mutual aided Thrift

society is also being organized and employees are assisted by giving

loans up to ` 50,000/- to Non-Seasonal employees and ` 15,000/- to

seasonal employees with 9% of interest.

The company having a canteen with all facilities provided to

employees. About 700 persons are benefited on subsidized rates as

detailed below. Tiffin and Tea are being supplied to the work spots and

also providing at canteen in the stall. The management is present in on

Wristwatch, Dhoti and Angavastram to the employee and a Saree with

blouse piece to his spouse along with one kg. of Sweets on founder's day

i.e. on 4th March. Every year 15 Scholarships cash award ` 10,000/- are

being awarded to meritorious students of our employees children who are

selected for professionals courses. Employee who retires from service on

attaining the age of 60 years are being presenting ` 10,000/- each as

Retirement benefit to permanent employees and ` 5,000/- to Seasonal

employees (minimum service is 20 years) Pension will be giving ` 200/-

p.m. to the non seasonal and ` 100/- p.m. to seasonal employees.

Employee who died during the service ` 20, 000/- paid to his dependent

as Death benevolent fund and ` 10, 000/- to the dependents seasonal

 

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employees and ` 2, 500/- as funeral expenses. Elementary and High

School Education is provided to the children of employees. Beautiful

buildings are constructed. Free education will be provided to all the

students joined in the school and the school is maintained by the

company. Computers are installed in the school for 8th to 10th class

students of our school and house wiring vocational training also

imparted to the students. Group Gratuity Scheme under LIC is being

provided to cover risk of the life of our employees. In case of death,

Gratuity is being paid to the dependent for the balance period of service

(till the retirement age) also. The Management has kind enough paying

an exgratia ` 6,000/- instead of Bonus, as all the employees are not

entitled to get the Bonus as per Bonus Act.

RESEARCH AND DEVELOPMENT

To maintain the quality and competitiveness in technology in-

house Research and development is started by the KCP Sugars and

Industries Corporation Limited early in 1970. This is manned by

qualified and experience engineers and technologists. Recently a few

projects like ‘Crop-Weather Relationship in Cane’, Application of

computer technology in the development and procurement procedures in

the cane cultivation has been taken up under Research and Development

project.

SUGAR CANE RESEARCH

The Company has been investing substantially in cane research to

ensure sustainable and profitable crop for better recovery. The Company

has a few sugar cane research farms established and monitored to

facilitate the farmers looking for solutions in sugar cane farming,

 

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measures to deal with pest disease, good seeds, quality inputs and

technical advice, resulting in profitable and sustained sugarcane

farming.

The company works closely with the farmers of our command area

on a day-to-day basis, to identify the problems of sugar cane cultivation

and the requirements of farmers and provide them with necessary feed

back to solve their problems in order to enhance the profitability. It also

provides necessary inputs such as soil analysis, fertilizer

recommendation, clean seed material, plant protection, etc. It is

monitoring the crops along with farmers at various stages of its growth

and advises them as and when necessary.

The company has gone for re-charging the tube wells to ensure

sufficient of Water Table to manage in a draught situation and advised

'drip irrigation' to affordable farmers. It also takes care of crop sensors

and provides free high quality healthy planting material to farmers to

ensure healthy productive crop.

FUTURE PLANS OF THE KCP SUGARS & IC LTD.

a) To identify new technologies whenever it is possible and makes use

of the same for improved results.

b) In view of the cute shortage of agricultural labour the following

measures are explored to partially mechanize the cane cultivation.

c) Induce farmers to use power tiller drawn planters and mini tractor

drawn implements.

d) Identifying and developing suitable sugarcane harvester calydaying

the soil conditions and land holdings of our command arise.

 

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e) In-depth study is in progress in distillery division to adopt new

technologies for improving the yield and reduce the discharge of

spent wash.

f) Identifying value-added products from the by-products and to

promote renewable energy from adjustrial waste.

 

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UNIT-2: THE DELTA SUGARS LIMITED

HISTORICAL BACKGROUND

Sree Hanuman Co-operative sugars Ltd., located at Hanuman

Junction is registered on 30-09-1972 and the installed capacity of the

factory are crushing per day 1250 TCD. As on March 1991, enrolled

members in the society are 6,334. Hanuman Junction Co-operative

Sugar Mills that is laid off in September 2001 is taken over and revived

in November 2001 by Delta sugars Ltd. It is an example of the

implications of revival of closed state level public enterprises through

privatization for varied stakeholders of enterprise reform programme in

Andhra Pradesh. Contrary to the fears of a section of the society about

the moves of privatization of sugar factories, transformation of

Hanuman Junction Co-operative Sugar Mills into the Delta Sugars Ltd.,

reveals a different reality. Perceptions of the workers, cane farmers and

Sugar enterprises in the area demand attention to appreciate the nature

of implications of privatization programme.

Cross-section of the society in the sugarcane belt of Hanuman

Junction Co-operative Sugar Mills views privatization with hope and

expectations for a brighter future. However, there are issues that need

to be resolved to address apprehensions and conflicts of the pre

privatization tangle. A closer look at the ground realities makes one

believe that post privatization scenario after another crushing season is

likely to present a different picture more in favor of the transition as by

then the pending issues of pre and post privation would be resolved

meaningfully. Issues that require attention include payment of job

severance compensation for the workforce that is not absorbed by the

new management, capacity building of the surplus labor force and

resolution of the payment of long standing arrears to the farmers.

 

181  

In September 2001, the Government of Andhra Pradesh privatized

the sugar factory and running by the private management i.e., M/s

Delta Sugars Limited, Hanuman junction. The factory registered under

Companies Act 1956. The present capacity of the plant is enhanced to

3000 MT per day. There are 150 villages in the area of operation of the

factory from where it has enrolled the members. These villages are

extended into 9 mandals. The total land holding of the members is

about 6529 acres and the average holding of the members of each

members work out to 4.8%. About 90% of the area hold by the members

is quiet for cane cultivation. As per by law no.33, it is obligatory on the

part of the member to supply cane 25 MTs. During each crushing

season but due to lack of proper irrigation facilities, lack of

remuneration price to cane, riots are not showing such interest to grow

cane. So to make the cane cultivation economical, the company has to

provide good seeds. Material incentives for early maturing, high yielding

and better varieties and to make cane cultivation viable to farmers. To

achieve this object, developing seed nurseries and providing pesticides

etc., to farmers is essential.

ENTRENEUR’S PROFILE

The Chairman of the Delta Sugars Ltd., Dr.Gokaraju Ganga

Raju is the son of illustrious Late Sri G.Ranga Raju, Former Chairman

of Tirumala Tirupathi Devasthanam and Former MLA and is a

Pharmacy Graduate and an approved Chemist by A.P.Drug Control

Administration, Hyderabad. Medicina Administrative Institute, Srilanka

awarded him with Doctorate. He has promoted "Chemiloids" in 1976

and it is grown as 'Laila Group of Companies'. He has made his entry

into Financial Sector by establishing Laila Finance Limited. He acquired

Delta sugars Limited in the year 2001 and turned it into a profit making

 

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company in a short span of time. He started a College of Technology at

Miyapur, Hyderabad viz., Gokaraju Rangaraju Institute of Engineering

& Technology and a Jr.College at Aswaraopet, Khammam, which is a

Tribal Area. He is the Vice Chairman of Alluri Sitarama Raju Academy

of Medical Sciences, Eluru; External Expert of Academic Council of

Andhra Loyola College, Vijayawada; Member of Governing Body of Maris

Stella College, Vijayawada. Expert Member of Academic Council of

Montewsori Mahila Kalasala, Vijayawada. President of Andhra Cricket

Association and Secretary to Krishna Dist. Cricket Association and is

holding important positions in various Associations, Foundations,

committees etc.

Managing Director, Sri G.V.K. Ranga Raju (Eldest son of Dr.

Ganga Raju) is a Bachelor of Engineering (Chemical)

from Andhra University, Visakhapatnam. He is also a Director in Laila

Aquatech Limited., Laila Finance Limited., Laila Credits Pvt. Ltd.,

Ramaraju Fish Farms Pvt. Ltd., and Nagarjuna Food Products Pvt.

Ltd., Laila Infotech Ltd., Partner in Laila Impex, Laila International,

Chemiloids, Herbex and Plantex. He is Vice President of Gokaraju

Educational Society which runs premier institutions like Gokaraju

Rangaraju Institute of Engineering and Technology and Gokaraju

College of Pharmacy at Hyderabad.

Sri G.Rama Raju (Younger son of Dr. Ganga Raju) is a M. S

(Pharmacy) from USA. He is also actively involved in the management

of ASRAM Medical College at Eluru (WG Dt. AP). He is also a Director

in Laila Aquatech Limited., Laila Finance Limited., Laila Credits Pvt.

Ltd., Ramaraju Fish Farms Pvt. Ltd., and Nagarjuna Food Products

Pvt Ltd., Laila InfoTech Ltd., Partner in Laila Impex, Laila

International, Chemiloids, Herbex and Plantex. He is Secretary

of Gokaraju Educational Society which runs premier institutions

 

183  

like Gokaraju Rangaraju Institute of Engineering and Technology

and Gokaraju College of Pharmacy at Hyderabad.

VISION AND MISSION

The Delta sugars limited, is committed to satisfy their customers,

for the products they develop and supply. The Delta sugars Ltd is

committed to actively promote the safety, health and well being of all its

personnel. Delta sugars Ltd will ensure that these aspects are inbuilt

and become integral part of its operations and strategic planning.

The Delta sugars Ltd also is committed to make available

necessary funds, resources and any such means required to

implement the occupational health, safety and welfare (OHS & W)

policy and commits to ensure, (a). A safe work culture that minimizes

the risk of injury or illness to its personnel. (b). Adequate facilities at

work places, and (c). Regular training, instructions and information to

all its personnel on OHS & W.

LOCATION

Sree Hanuman Co-operative Sugar Ltd is located in Seri

Narasanna palem village, Bapulapadu Mandal, Krishna District, A.P.,

beside National High Way 5 which is about 42 kms away from

Vijayawada and 4 kms away from Hanuman Junction. The Head Office

is on the factory site, the main railway station is Nuzvid, which is at a

distance of 6 kms from the factory site, and the main railway station is

Vijayawada. The main raw material of the sugar factory is sugarcane.

The sugar production area of the organization is very vast. There are

260 villages in the area of operation of the factory. The 260 villages are

extended into 16 mandals. Lorries, bullock carts and tractors transport

 

184  

sugarcane and other materials. There are two major towns, Vijayawada

at a distance of 42 kms and Eluru at a distance of 23 kms from the

factory. Factory is connected to these two towns by railway as well as

roadways. The factory has nearest marketing facility at Vijayawada

which is one of the biggest centers in South India. It offers a wide

market for sale of sugar and other by-products. There are three sugar

factories in the immediate neighborhood these include 1) The KCP & IC

limited, Vuyyuru, which is at a distance of 40 KMS. 2) The West

Godavari Co-op sugar, Bhimadole that is at a distance of 43 KMS. 3)

The KCP Sugar & IC Ltd., challapalli at a distance of 65 KMS.

SIZE AND OVERVIEW OF THE UNIT

The crushing capacity of the plant is initially 1250 tonnes per

day. This plant is gravity flow type. The white mass will flow by gravity

pumps and avoided as the crystal ligers are placed in the first floor

along with the evaporator, pans in second floor. The present capacity of

the plant has extended to 3000 MT tonnes per day.

During the year under review, the Management had taken steps

to replace the existing machinery in the sugar units as a part of

modernizing the existing plant and machinery, and to adhere to the

changing technological changes with the internal generation of funds.

Implementing various productivity improvement programmes for

sugarcane cultivation. Extending various inputs to the farmers for

purchase of fertilizers, seeds and other necessary materials and also

extended load facilities to farmers to establish drip irrigation. Adopting

of different extension methods to inculcate cane cultivation among

small farmers.

 

185  

CHART-5.3: ORGANSIATION CHART –THE DELTA SUGARS LTD.

AGRICUTURE HUMAN RESOURCE & SERVICES

PROCESS ELECTRCIVIL. FINANCE

GL STORES MYCOR

CO2 R&D AND C L P

ENGINEERING 

DISPENSARY

PERSONNEL &WELFARE CANE YARD

BIOTEC

TIME OFFICE TRANSPORT SECURITY SERVICE

COMPUTER DISTILLARY PURCHASE SUGAR SALES HYD.VJA. OFFICE ETHANOL

CANE OFFICER SUGAR LAB

CHAIRMAN AND MANAGING

BOARD OF DIRECTOR

EXECUTIVE DIRECTOR

GENERAL MANAGER

 

186  

ORGANIZATION AND MANAGEMENT

The organization has five departments. The Departmental Heads

are accountable to managing director who co-ordinate all the activities

of the departments. He is accountable to chairman and board of

directors. The departments of organization functioning these following

departments are as follows Administrative Department, Accounts

Department, Engineering Department, Agriculture Department,

Manufacturing Department.

1) Administrative Department

The Administrative Officer is the Head of this Department. He is

responsible to the Managing Director for his department activities. The

Duties of the departments are as follows, Purchasing, Inventory control,

Sales of sugar and molasses, Personal activities, Security and other

general matters. The administrative Officer directs, motivates the

subordinates and controlling the above mentioned activities. The

following personnel assist administrative officers are Office manager,

Purchase Manager, Store Keeper, Sugar Godown In-charge and Security

Officer.

2) Accounts Department

Chief Account’s officer is the Head of this department. He is

responsible to the Managing Director for the maintenance of the accounts

of all divisions of the company and his duty involves the preparation of

balance sheets and correspondence with the investors, merchants, banks

and financial institutions. This department maintains three account

ledgers such as Cane Accounts, Store Accounts and General Accounts.

 

187  

3) Engineering Department

Chief Engineer is the Head of this Department. He formulates the

techniques of cutting and crushing sugarcane, suiting top the

machinery and equipment. He makes the recommendations regarding

planning of engineering section, such as rehabilitation and

modernization. He has to supervise, plan schedule maintenance work

with the assistance.

4) Agricultural Department

Chief Agricultural Officer is the Head of this department. The

main function of this department is the procurement and development

of sugarcane. Chief Agricultural officer estimates the sugarcane supply

of each season. These estimates are useful to the organization for

preparing the budgets. Deputy Chief Agricultural Officer, Assistant

Agricultural Officer and Field men are assisting Chief Agricultural

officer

5) Manufacturing Department

The actual sugar production starts from the manufacturing

department. The manufacturing department is to see the good quality of

the sugar production. Chief chemist is the head of this department,

responsible for the overall operation of sugar manufacturing of the

factory from juice to final sagging sugar. He has to constantly endeavor

to minimize sugar losses and process and has to institute revise and

check chemical control methods. Deputy Chief Chemist, Manufacturing

Chemist, Lab and Bench Chemist are assisting the Chief Chemist

The Board has unfettered and complete access to any information

within the company and to any employee to the company. At meeting of

the Board, it welcomes the presence of managers who can provide

 

188  

additional insights into the items being discussed. The information

regularly supplied to the board includes like annual operating plans

and budgets, capital budgets update, quarterly results of the company

and its operating divisions in comparison with the budgets, Minutes of

the meeting of the board, audit committees as well as the abstracts of

the circular resolutions passed, general notices of interests of directors,

materially important litigations, show cause notices, demands,

prosecution and penalty notices, Fatal or serious accidents or

dangerous occurrences any material effluent or pollution problems, Any

material default in financial obligations to any by the company or

substantially non-payment for goods sold by the company, significant

labour problems and proposed solutions, sale, lease, transfer of

material nature of investments, subsidiaries, assets, which is not in the

normal course of business.

 

189  

TABLE-5.8: HUMAN RESOURCE STRENGTH OF THE DELTA SUGARS LTD., AS ON 31.03.2010

(Figures in no’s)

S.NO Category(grade) Permanent Seasonal Consolidate salaried

Daily App.

Daily total

1 2 3 4 5 6 7 8 9

10

11

12

13

Officers

Supervisors-A

Supervisors-B

Supervisors-C

Clerk-A

Clerk-B

Clerk-C

Highly skilled

Skilled-A

Skilled-B

Semi-skilled

Un-skilled

Trainees and App

4(100.0)

5(100.0)

2(100.0)

3(37.5)

2(66.66)

7(36.84)

4(21.05)

5(100.0)

14(73.68)

16(51.61)

26(41.26)

12(23.07) -

- - -

5(62.5)

1(33.33)

12(63.15)

15(78.94) -

5(26.31)

15(48.38)

37(58.73)

40(76.92) -

- - - - - - - - - - - -

70(41.17)

- - - - - - - - - - - -

100(58.82)

4(100.0) (1.00)

5(100.0) (1.25)

2(100.0) (0.50)

8(100.0) (2.00)

3(100.0) (0.75)

19(100.0) (4.75)

19(100.0) (4.75)

5(100.0) (1.25)

19(100.0) (4.75)

31(100.0) (7.75)

63(100.0) (15.75)

52(100.0) (13.00)

170(100.0) (42.50)

Total 100(25.0) 130(32.5) 70(17.5) 100(25.0) 400(100.0)

Note: Figures in the brackets indicate the percentages to respective total.

Source: Office Records of the Delta Sugars Ltd.

 

190  

HUMAN RESOURCE STRENGTH

Human resource strength of the Delta Sugars Limited is

presented in the table-5.8. It is evident from the table total employees of

the company are 400. They are categorized into four types, they are

Permanent Employees, Seasonal Employees, Consolidate salaried

Employees and Daily wage workers. Employment exchange is the major

source of recruitment to the Delta Sugars Ltd., personnel department

deals with this the recruitment will takes places through various steps

such as selection, interviews and appointments.

Among these Permanent employees are 25 per cent (100) of the

total. Seasonal employees are 32.5 per cent (130), Consolidate salaried

employees are 17.5 per cent and daily wage workers are 25 per cent.

The total incurred amount for the employees in respect of salaries and

allowances is ` 220.9 lakhs during the year 2005-06. Both permanent

and seasonal employees got 12% provident fund from their salary and

12% from management. Every year company gives 8.33% salary as

bonus. The employees are provided with earned, casual and special

leaves. Every employee works 8 hours in the company according to their

allotted shifts.

POLICIES WITH RESPECT TO EMPLOYEES

Delta Sugars limited has focused on the development of human

resources and pooling of intellectual capital to attain increased

productivity and maximize profitability. Allocation of limited human

resources has been carefully planned to meet the needs of new

dynamics of management and minimize cost of production. The

management cadre at the Delta Sugars Limited consists of a few but

rich experienced personnel in their fields.

 

191  

The employees of Delta Sugars Limited are a working group team

of self-motivated and motivating individuals. They carry out their

respective jobs with a vision and missionary zeal. The employees

perceive the goals of the company as their personal goals and spare no

efforts in accomplishing the tasks assigned to them.

Sugar Industry being a seasonal industry has different staff

strength during season and off-season Delta Sugars limited is one of a

sugar unit in India, which is not over-staffed in spite of political

pressures and other constraints.

1). Training programmes and Management development programmes

are conducted to educate the employees and to enable them to

discharge their duties with panache and aplomb.

2). Shop floor training is imparted to workers to hone their skill.

3). Workshops are conducted for the benefit of employees to educate

them on preventive maintenance. Services of experts are

summoned to help and educate to the workers.

4). Employees are continuously guided about industrial safety and

safe industrial practice.

5). The employees are encouraged to participate in suggestion

scheme is in operation, which enable the employees to frankly

and fearlessly put-forth their suggestions for overall improvement

of the performance.

6). The strengths and weaknesses of each employee are critically

evaluated to ensure that the right peg is in right hole. Career

planning and job enrichment of each employee is an ongoing

activity in Delta sugars Limited.

 

192  

FACILITIES TO THE EMPLOYEES

The Delta Sugars Limited has evolved its own employee’s policy,

briefly described as under to its workers and staff to obtain the

qualitative performance in an un-interrupted way 1). Issuing of festival

advances to workers to meet their expenditure. 2). Creating the

provisions for leave encashment and gratuity to the entire employee’s.

3). Providing uniform to create an identity of the Company employee’s.

4). Supplying safety shoes in adherence to the safety norms and to

create a safety environment for the employee’s. 5). Issuing of timely

increments to the workers.

The company believes that the quality of its employees is the key

to its success in the long run and is committed to provide necessary

Human Resource development and training opportunities to equip them

with skill, enables them to adapt to contemporary technological

advancements.

None of the employees is in receipt of remuneration during the

year under review, in excess of the limits prescribed under Section

217(2A) of the Companies Act, 1956 and as amended and therefore the

particular required to be furnished under Companies Rules, 1975, are

nil.

 

193  

TABLE-5.9: OPERATIONS OF THE DELTA SUGARS LTD., 2001-01 TO 2009-10

Year Cane crushed (lakh MTLS)

Annual growth

rate

Sugar production (lakh QTLS)

Annual growth rate

Sugar recovery

(%) 2000-01

2001-02

2002-03

2003-04

2004-05

2005-06

2006-07

2007-08

2008-09

2009-10

CARG

16513

189456

220449

295831

300965

283634

350019

285617

143590

138033

23.65

-

14.73

16.35

34.19

1.73

-5.75

23.40

-18.39

-49.72

-3.87

279347

294368

309832

328173

350321

307436

335554

277202

137847

123450

-7.8

-

5.37

5.25

5.91

6.74

-12.24

-9.14

-17.38

-50.27

10.44

10.24

10.15

10.49

10.34

10.37

10.18

10.12

9.89

9.60

8.94

Source: Annual Reports and Office Records of the Delta Sugar Limited.

 

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TABLE-5.10: SALES PERFORMANCE OF THE DELTA SUGARS LIMITED., DURING 20001-02 TO 2009-10.

Year Revenue from sales(lakh)

2000-2001 4837.01

2001-2002 4902.06

2002-2003 4731.05

2003-2004 5042.18

2004-2005 5462.32

2005-2006 5941.58

2006-2007 5502.47

2007-2008 5255.10

2008-2009 5210.10

2009-2010 5124.02

Source: Office Records of the Delta Sugars Limited.

 

195  

TABLE-5.11: FINANCIAL PERFORMANCE OF THE DELTA SUGARS LIMITED., DURING 2000-01 TO 2009-10.

YEAR Total income (in lakh)

Annual growth

rate

Expenditure (in lakh)

Annual growth

rate

Net Profit (in lakh)

Ratio of Expenditure

to total income

Ratio of Net Profit

to total income

2000-2001

7340

-

3670.12

-

350.49

49.98

4.77

2001-2002

6689.32

-8.86

3127.36

-14.79

332.68

46.75

4.97

2002-2003

6839.01

2.24

2896.18

-7.38

380.92

42.34

5.56

2003-2004

5976.26

-1.26

4326.42

49.37

190.12

72.39

3.18

2004-2005

7032.53

17.67

3670.29

-15.16

395.18

52.19

5.16

2005-2006

7258.40

3.21

3560.92

-2.99

335.29

49.05

4.61

2006-2007

5561.89

-23.37

4527.24

27.13

337.71

81.39

6.07

2007-2008

16995.77

205.5

5239.55

15.73

11.40

0.82

0.06

2008-2009

6564.02

-61.37

5536.58

5.66

23.70

84.34

0.36

2009-2010

5872.53

-10.53

4273.27

-22.81

179.73

72.76

3.06

CARG

-4.14

3.71

-11.72

Source: Office Records of the Delta Sugars Limited.

 

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OPERATIONS OF THE DELTA SUGARS LIMITED.

The operational scenario of the Delta Sugars Ltd, during 2000-01

to 2009-10 is presented in table-5.9. It is evident from the table that the

cane crushed which is 16513 lakh MTLS during 2000-01 reached the

peak of 350019 lakh MLTS during 2006-07 stood at 138033 lakh MLTS

during 2009-10. The annual growth rate of cane crushed is very high

during 2003-04, is 34.19 per cent, and in the year 2009-10 is -3.87 per

cent. Compound annual rate of growth during last ten years was 23.65

per cent. The production of sugar which is 279347 lakh QTLS during

2000-01, also reached the height of 350321 QTLS during 2004-05 and

stood at 123450 QTLS during 2009-10. The annual growth rate of sugar

production during the last ten years the present year during 2009-10 is

high at 10.44 per cent, least at -50.27 per cent during 2008-09. It is

observed that the cane crushed and sugar production by the factory

increased at a growth rate of 23.65 per cent and -7.8 per cent during

the decade under reference. The sugar recovery during the period under

review maintained, more or less, at a consistent rate. The recovery rate

ranged between 10.24 per cent (2000-01) and 8.94 per cent (2009-10).

The above table reveals that there are fluctuations in the

sugarcane crushing from year to year. The major reasons in the climatic

conditions are more effected in yielding of sugarcane. The recovery is

decreasing from 10.24 per cent to 8.94 Per cent during under study. It

implies whether required to install modernized machineries and

installed computerization in different areas of production process.

SALES PERFORMANCE

The sales performance of the Delta Sugars Limited in terms of

sales revenue shown above table-5.10 and can be seen the sales

revenue is increased from ` 5941.58 lakh to ` 4837.01 lakh there by

 

197  

recording during the five years under the study. Although the company

has made note worthy progress in terms of sales revenue, much more

improvement is designed in view of the seasonal nature of the

industries and growing competition in the market.

FINANCIAL PERFORMANCE

The financial performance for the Delta Sugars Ltd, in terms of

total income, expenditure, and net profit are exhibited table-5.11. It can

be observed that the total revenue of the organization has decreased from

` 7340.39 lakh in 2000-2001 to ` 5872.53 lakh in 2009-2010. Annual

growth rate of total income in the year 2009-10 is -10.53 per cent,

Similarly the expenditure has gone up from ` 3670.12 lakh in 2000-2001

to ` 4273.27 lakh 2009-2010 with some fluctuations, annual growth rate

of expenditure from 2009-10 is -22.81 per cent. The net profit made by

the organization fluctuated between 337.71 lakh (2006-07) and 11.40

lakh (2007-08), and 179.73 lakh during 2009-10. the table shows the

ratio of expenditure to total income and ratio of net profit to total income

during the ten years period, the ratio of expenditure to total income

during increased from 49.98 per cent (2000-01), to 72.76 per cent

during 2009-10. Ratio of profit to total income fluctuation during the

years i.e. 4.77 per cent during 2000-01 and 3.06 per cent during 2009-

10. In the five years period the compound annual rate of growth indicate

- 4.14 per cent of total income, 3.71 per cent of expenditure, and -11.72

per cent. Net profit to the ten year period indicating the volatile financial

position of the organization. This may be attributed to higher growth of

components of revenue like the sales price of sugar and allied products.

 

198  

SUGAR MANUFACTURING UNITS IN WEST GODAVARI DISTRICT UNIT-3: THE ANDHRA SUGARS LTD

INTRODUCTION

The Andhra sugars limited is established on the 11th August, 1947

by two cousins who are farmers in Tanuku. This company produces a

number of products using locally available renewable resource to

produce value added products and generating employment to 4,500

people and 15,000 farming families and helped in boosting the rural

economy of the region. This is, perhaps, the only industrial group in

India that has its plants, head quarters and management allocated in

rural and farming region.

Mr.P.S.R.V.K. Ranga Rao is the founder chairman of the Andhra

Sugars Limited., who shared in the shaping of the company and making

it into what it is today. The natural phenomenon of Tanuku and Dr.

Mullapudi Harischandra Prasad’s enterprising spirit sowed the idea of

industrialization. The idea of rooting an agricultural industry here

crystallized into a small sugar factory 63 years ago.

The Andhra Sugars Limited., is incorporated initially with an

industrial license for cane crushing of 600 tonnes per day. First crushing

in the factory is started in the year 1962. Gradually, the capacity of the

sugar plant is increased to 5,000 tonnes per day. The Andhra Sugars

Ltd., is the first factory to introduce diffusion centrifugal machines. In

order to utilize the by-product of the sugar factory, i.e., molasses, the

Andhra Sugars Ltd., started a distillery in the year 1962, for the

manufacturing of industrial alcohol. For further utilizing the industrial

alcohol, acetic anhydride/acetic acid plant is established in the same

year, i.e., 1962, and Ethyl Alcohol plant is commissioned in the year

1965.

 

199  

Acetic anhydride/acetic acid are manufacturing simultaneously

and this process is only one of its kind in the country. The acetic

anhydride/acetic acid plant is supplied by a Swedish firm for the

manufacture of acetic anhydride and acetic acid to Messers Southern

Hydro Carbons Limited., Udamapet, Tamilnadu, and Messers, Hindustan

Organic Chemicals Limited (a government of India undertaking),

Rasayani, Maharashtra. Recently, the company has supplied a 10 tonnes

per day capacity acetic acid (from ethyl alcohol) plant on turnkey basis

to Sanjeevani Sahakar Karkhana Limited, Kopargaon, Maharashtra,

which has won the customers’ appreciation for design, workmanship and

performance.

LOCATION OF ANDHRA SUGARS

Tanuku Location

This is a sugar and organic chemical production operation,

commencing production at Tanuku in 1952 at the sugar mill with a

crushing capacity of 600 tonnes of cane per day, which has expanded to

crushing capacity of 5,000 tonnes per day to day. To utilize the molasses

from the sugar plant, a distillery is set up to produce industrial alcohol.

This is followed by the setting up of the acetic acid, acetic anhydride and

ethyl acetate plant that used alcohol as its raw material. In addition to

these products, Aspirin, Unsymmetrical Dimethyl Hydrazine and

Monomethyl Hydrazine are also produced at the Tanuku location.

Kovvur Location

This is an inorganic chemical production operation, commenced

production at this location with the setting up of a sulphuric acid-

superphosphate plant in 1960. Then came the caustic soda and caustic

 

200  

potash plants. Utilizing by-products from these plants, hydrochloric acid,

chloro sulphuric acid and alum are produced in addition to providing

chlorine to many industries.

Guntur Location

This is an operation producing products based on vegetable oils.

Operations at this location commenced with the processing of cotton

seed, sun flower seed, rice bran and oil seed cakes. The top quality oil is

refined and marketed in consumer packs and the non-edible is

hydrogenated for industrial use. The de-oiled cakes and bran is partly

used to produce livestock and fish feed and the rest is being exported.

The Company has set up a wind farm at Ramagiri in the Anathapur

District of Andhra Pradesh state to produce 2 MW electricity and is

licensed to set up an additional 8M W capacity. It is in the process of

setting up of another sugar mill with a crushing capacity of 2,500 tonnes

of cane per day at a location 80 km from Tanuku and a caustic soda

plant of 100 tonnes per day capacity is also setting up an R and D centre

for tissue culture and sugarcane breeding for the multiplication and

development of highly productive sugarcane lines. Taduvai location, this

is 2,500 TCD sugar plant is commissioned in 1997. Saggonda location,

this is 100 TCD caustic soda plant is commissioned in 1997, and

Bhimadole location is manufacturing unit.

Subsidiaries

The Andhra farm chemicals corporation limited located at kovvur

produces hydrazine making use of the chlorine gas and caustic soda

available from the caustic soda plant and JOCIL limited at dokiparru 15

km from Guntur. It is soap manufacturing and stearic acid plant.

 

201  

ASSOCIATE COMPANIES

Sree Akkamamaba textiles limited., are sculled up on 8th April

1954 for the production of various types of yarn for the weaving industry.

This commenced production within an installed capacity of 8,000

spindles and has expanded to a 50,000 spindles capacity producing

cotton blended and synthetic fiber yarns. The Andhra petrochemicals

limited., is promoted for the production of 30,000 tonnes per annum of

oxo-alcohols at Visakhapatnam, with technical collaboration from M/s.

Davy McKee of London, using the latest LP oxo process technology,

designed to produce 2-Ethyl Hexanol or Butanols.

MANAGEMENT

Dr. Mullapudi Harischandra Prasad, one of the founders, a

renowned industrialist and philanthropist, heads the company as

chairman and managing director. He is ably assisted by four whole-time

directors. Dr B.B.Ramaiah, (ex- Commerce Minister, Govt. of India) is the

managing director (tech.). Joint Managing Directors are Sri P.

Narendranath Chowdary, Sri M. Narendranath, and Sri M. Thimmaraja,

and Executive director is Sri P. Achuta Ramayya, and Sri P.S.R.V.K

Ranga Rao

202  

CHART-NO.5.4: ORGANISATION CHART-THE ANDHRA SUGARS LTD.

     CHAIRMAN &MANAGING DIRECTOR 

        Executive Director 

           Chief executive     G.M(Cane)  D.C.M(F&A)     D.G.M   

Purchase   Transport GH GenSt        Dy Manager Cane       Manager Cane I/c               I/c            I/c    I/c               (F&A)             Acct                                                                                                            

                                                                                       Clerk                Sr      Mnager    Yard  Ao         Inch       sup 

Managers   ACSDO   Clerk     Cane                              Exam                               Unid Banta FM                       ( Diy Banta) 

 Clerk        Mech      Cooks Clerks          Boys          Drivers      Boys                                          Cleaner                                                                          Boys               Public Rela&Liason 

                                                        Mol&                                                

                                                                                        

  Est Inchg            MO            H T K             Security    Welfare 

     Clerk               Comp            T K                                                    Welfare                                                                                       Sr off (EDP)                                                    Clerk                                                                                                            Sr Programmer 

                                                                                                                                                                                                                                                                                                                                                                                                                    

   L W O 

                                             Trainee                       Progranner          

                                                                                  SystAsst/Asst Prog         

                                                                                       D E O’s         

P O 

F M           Tr 

   T r 

G.M. (Factories)

Manager    Chief            Manager                                                                          Dist Engg         Engineer        (Coger)                                                                               Ma

Sr Engr   Sr Engg           J E                                                       Sr Engg    Sr Engg   Dy Manager (p)  Asst Mngr A .E            A.E              Sup          (Elec)       (Inst)     Asst Manager (p)   (QC)        A

  JE              JE           Workmen      AE              AE       Sr. Mfg.Chem.    Lab Chem. 

Sup.         Sup          Tr/App             JE               JE      Mfg.Chem     TraineesChemis

Clerk/DM Clerk                         workmen      Sup       Asst.                  Lab Boys 

Workmen   Workwomen   Sr.Engg       Workmen Tr/.App                                   Civil    Tr/App 

Sugar sales  I/C    P.S. to                                      Tracer       Maistry           

Sales  

Clerks 

Tr     Tr      Banta

        CE            Desp                    

      Steno                           Tel opr   Clerk 

 D.G.M (Elec)

Tr/.App 

           Clerk       Tr/App

D.G.M.(Process) 

Mfg.Chem            Tr/App 

H.panMan 

Pan Incharge                     Ad

Workmen        A G M 

Tr/App 

     Officer 

  AAO 

 Clerks 

D C M 

Mol&Begassee      Sales clerk  

 

G.

  

   (Tech)              

Staff&                 

workers Workers             

     

 

203  

TABLE-5.12: HUMAN RESOURCE STRENGTH OF THE ANDHR SUGARS LTD., AS ON 31.03.2010. (Figures in no’s)

Product

Permanent No’s

Temporary No’s

Trainees No’s

Daily wage No’s

Apprentices No’s

Total No’s

Sugar Alcohol Acetic acid Acetic anhydride Ethyl acetate Chlorine Sulphuric acid Superphosphate Sulphuric acid Acid Total

400(46.51)

250(71.02)

117(86.02)

43(87.75)

36(26.47)

50(98.03)

169(100.0)

280(62.22)

5(100.0)

4(66.66)

1354(61.15)

6(0.69)

19(5.39) - - - - -

4(0.88) - -

29(1.30)

14(1.62)

30(8.52)

7(5.14)

2(4.08)

33(24.26)

1(1.96) -

40(8.88) -

2(33.33)

129(5.82)

420(48.83)

53(15.05)

12(8.82)

4(8.16)

67(49.26) - -

126(28.00) - -

682(30.80)

20(2.32) - - - - - - - - -

20(1.35)

860 (100.0) (38.14)

352(100.0) (15.89)

136(100.0) (6.14)

49(100.0) (2.21)

136(100.0)

(6.14) 51(100.0)

(2.30) 169(100.0)

(7.63) 450(100.0)

(20.32) 5(100.0) (0.22)

6(100.0) (0.27)

2214(100.0) (100.0)

Note: Figures in the brackets indicate the percentages to respective total.

Source: Office Records of the Andhra sugars Ltd.

 

204  

HUMAN RESOURCE STRENGTH

The manpower strength in the initial year only 505. The figure as

on 31.03. 2010 is 2,214 including seasonal staff. Table 5.12, indicates

the manpower consists of different categories viz. permanent, temporary,

trainees, daily-wages and apprentices. Table reveals major share of

employees are permanent 61.15 per cent (1354), 30.80 per cent are daily

wage employees. In the manufacturing of sulphuric acid product plant all

the employees are permanent.38.14 per cent (860) of employees are only

working at sugar production section. This is major share against the

total employees.

SOCIAL RESPONSIBILITY AND SOCIAL COMMITMENT

As a form of social responsibility, the Andhra sugars Ltd., have

provided a number of facilities to the general public. Some of them are

1. Under Dr. Mullapudi Venkatarayudu Memorial Education Trust,

Polytechnic College has been established with hostel, library and

playground facilities.

2. Dr. Mullapudi Venkatarayudu Memorial Medical Trust has been

established at Tanuku, which is fully equipped large, hospital with

200 beds.

3. Rangaraya Medical College was established in Kakinada. The

company has provided a number of facilities to the workmen and

staff members. Some of them are:

a) Workers and staff members are conveniently housed with all

amenities found in the quarters allotted to them. Nearly 300

families are provided housing facilities in the quarters

constructed at the Tanuku unit itself.

 

205  

b) A school named Mullapudi Thimmaraju primary and secondary

school within the colony at Tanuku has been started and

successfully running in imparting the basic education to the

young ones.

c) A large library housed in Sri Rangaraya memorial club provides

leisurely pastime for the employees. The club facilitates the men

to engage in outdoor as well as indoor games.

d) Medical aid is given both at Tanuku and at Kovvur.

Dispensaries have been built and are headed by qualified

doctors to treat ailing employees and their dependents.

e) Canteen inside the factories both at Tanuku and Kovvur serves

the needs of the employees.

f) Grocery and consumer articles for the employees are sold

through the venkatarayapuram co-operative stores Limited., a

post office is also housed within the colony at Tanuku.

The Andhra sugars Ltd., is dedicated to the betterment of the rural

area around them. Health and education are vital for the improvement of

the quality of human life. To achieve this, help is provided in setting up a

Medical College to produce doctors needed to man the rural health care

system and followed this by helping in setting up a modern hospital for

providing gynecological, obstetric, opthmologic, dental, orthopedic and

cardiac care. To help in improving education in the area helped in setting

up and operating two high schools and polytechnic college. Help is being

given to set up a modern library and cultural centre that will have a

1,000 seated indoor auditorium and an outdoor auditorium.

 

206  

TABLE-5.13: PRODUCT MIX OF THE ANDHRA SUGARS LTD. Product Used for producing

Sugar food Industrial alcohol Acetic acid Acetic anhydride Ethyl acetate Caustic soda (lye, solid, flakes) Chlorine Sulphuric acid Superphosphate Chlorosulphuric acid Unsymmetrical dimethy1 Hydrazine(UDMH)

Acetic acid, acetic anhydride, ethyl acetate, PVC, polyethylene, arrack. Cellulose, acetate, acetanilide, dyes leather tanning, acetate salts, pharmaceuticals. Cellulose acetate, aspirin, dyes, perfumes. Ace to acetic ester, solvents, paints dehydrating and cleansing, agents. Drugs, chemicals, and galvanizing chemicals. Paper, chemicals, drugs, disinfectants and pesticides. Chemicals and superphosphate Fertilizers Drugs, dyes, pesticides Rocket propellant

Note: The Company’s Pilot plant for manufacturing unsymmetrical dimity hydrazine. (UDMH) is set up at Tanuku.

Source: Office Records of the Andhra sugars Ltd.

 

207  

THE PRODUCT MIX OF ANDHRA SUGARS

The main product of the unit is sugar which is manufactured at a

5,000 TCD capacity at the plant. The product mix of the company

includes 28 items. The company is engaged in the manufacture and sale

of sugar, organic and inorganic chemicals, non-conventional power,

caustic soda, etc. molasses is a by-product from sugar, which is the raw

material for company’s alcohol plant located at Tanuku which produces

industrial alcohol. The distillery runs on the more economical continuous

process, which produces 30 kl per day of industrial alcohol is the raw

material for the ethanol (absolute alcohol), acetic acid, acetic anhydride

and ethyl acetate. Bagasse which is the residue at the sugar plants after

extraction of juice in the production of sugar is being used for co-

generation as viewed from Table 5.13.

Sugar which is the major item of the production and sales of the

unit constitutes more than 40 per cent of the total value of the company

sales. Caustic soda and chlorine assumes a dominant share in the total

sales value. Sugar being the dominant product and the prospects appear

to be encouraging the company always initiates steps to crush greater

quantity of cane in every season. The company’s initiatives in this regard

include necessary assistance to the farmers by granting incentives and

subsidies for encouraging them to grow better quality of cane large

quantities. The management opines that, despite the significant role of

sugar industry are exposed to cyclical risks and variations. Variations in

natural factors and policies of the government are the stumbling blocks

for the prosperity of this industry. It is opined that the industry is still to

be fully liberalized because it regulates the cane price and dispatches of

sugar. The product mix of the company includes ethanol on a limited

scale. In the coming year, ethanol production in the country will receive

impetus as the government of India proposes to come out with a policy to

make mandatory the blending of ethanol with petrol.

 

208  

TABLE-5.14: PRODUCTS PRODUCED BY THE ANDHRA SUGARS LIMITED.

Station

Name of the product Installed capacity

Tanuku Kovvur CC(a subsidiary) Guntur C 12(a subsidiary)

Sugar Industrial Alcohol Acetic Acid Acetic Anhydride Ethyl Acetate butyl Acetate Carbondioxed Aspirin Unsymmetrical Dimethy Hydrazine Organic derivatives of hydrazine or of hydroxyl Amine Sulphuric Acid Superphosphate Caustic potash Caustic potash (membrane cell process) Hydrochloric Acid Chlorosuphonic Acid Chlorine Oleum Hydrazine Hydrate Processing oil seed Processing rice bran and oil seed cakes Vegetable oil refinery Vegetable oil hydrogen ration Fatly Acids Glycerin Soap

5000 MT cane/Day 99000 KL/Annum 1080 MT/Annum 720 MT/Annum 1268 MT/Annum 1268MT/Annum 5000 MT/Annum 1000 MT/Annum 90 MT/Annum 250 MT/Annum 45000 MT/Annum 66000 MT/Annum 2500 MT/Annum 16500 MT/Annum 6600 MT/Annum 20000 MT/Annum 9900 MT/Annum 6600MT/Annum 300 MT/Annum 45000 MT/Annum 63000 MT/Annum 18000 MT/Annum 6600 MT/Annum 37500 MT/Annum 1800 MT/Annum 10000 MT/Annum

Source: Office Records of the Andhra Sugars Ltd.

 

209  

UNSYMMETRICAL DIMETHY HYDRAZINE (UDMH) PILOT PLANT

The Indian space research organization (ISRO) had approached the

Andhra sugars limited to produce one tonne (UDMH) on trail basis. For

this purpose, a pilot plant is set up and is successfully commissioned in

the September 1985. Already about 250 Kgs. Of UDMH via chloramines

route has been produced in the plant. The technological innovation is the

key to a nation’s industrial growth today.

Four basic raw materials are required for manufacturing UDMH.

The Andhra sugars limited produces two of them viz. caustic soda and

chlorine. The remaining two acids, are also available indigenously, and

Andhra sugars limited buys them for their respective manufacturers. In

the world, besides India, only the USA, and USSR and France,

manufacture UDMH for use as a rocket propellant. In fact, ISRO had

entrusted the indigenous development of UDMH to Andhra sugars

limited because of its rich experience in the developing and implementing

world class technologies most effectively. The development of the UDMH

project is sponsored by ISRO with basic known-how support and

technical assistance. The pilot plant, however, is designed, fabricated

and commissioned entirely by the various departments of the Andhra

sugars limited.

The philosophy of the company has been articulated as the

utilization of its by-products to produce other quality products at

reasonable cost. The company has its operations at six in the state of

Andhra Pradesh in the southern India producing 25 different products as

can be viewed from table 5.14.

 

210  

TABLE-5.15: OPERATIONS OF THE ANDHRA SUGARS LTD., DURING 2000-01 TO 2009-10

Year Cane crushed

(lakh MTLS)

Annual growth

rate

Sugar production (lakh QTLS)

Annual growth

rate

Sugar recovery

(%)

2000-01

2001-02

2002-03

2003-04

2004-05

2005-06

2006-07

2007-08

2008-09

2009-10

CARG

917330

944589

1141111

817514

433111

473869

602182

500923

202193

129400

-17.7

-

2.97

20.80

-28.35

-47.02

9.41

27.07

-16.81

-59.63

-36.00

1035218

1040878

1307680

925005

495340

513548

632776

536842

206636

116340

-19.6

-

0.54

25.63

-29.26

-46.45

3.67

23.21

-15.16

-61.50

-43.69

11.25

11.02

11.52

11.37

11.46

10.84

10.61

10.64

10.22

8.99

Source: Annual Reports and Office Records of the Andhra Sugars Ltd,

 

211  

TABLE-5.16: FINANCIAL PERFORMANCE OF THE ANDHRA SUGARS LTD., DURING 2000-01 TO 2009-10

(` in lakh)

Year Turnover/sales Net profit after taxes

Annual growth rate

Net profit margin

2000-01 45801.89 4380.49 - 9.56

2001-02 40361.21 4537.65 3.58 11.24

2002-03 45376.80 5046.72 11.21 11.12

2003-04 50421.62 5894.62 16.80 11.69 

2004-05 45778.88 4362.94 25.98 9.53

2005-06 54177.80 6031.37 38.24 11.13

2006-07 63181.05 6414.76 6.35 10.15

2007-08 1538.09 4258.43 -33.61 8.26

2008-09 62330.14 4527.57 6.32 7.26

2009-10 58203.08 6675.65 47.44 11.46

CARG 4.08 7.34

Source: Annual Reports and Office Records of the Andhra Sugars Ltd.

 

212  

OPERATIONS OF THE ANDHRA SUGARS LTD

The operations of the Andhra sugars ltd., in terms of the cane

crushed, the sugar produced and the recovery rate for the decade ending

with 2009-10 are presented in table-5.15. As evident from the table cane

crushed and the sugar production was 917330 lakh MTLS and 1035218

lakh QTLS respectively during the 2000-01. The cane crushed increased

to 2, 02,194 MTLS during 2008-09, and stood at 129400 MTLS during

2009-10. The production of sugar experienced an increase to 206636

MTLS (2008-09) and stood at 11,634 MTLS by 2009-10. During the

decade under review, the cane crushed and sugar production by the

factory recorded annual growth rate of during 2009-10 is -36.00 per

cent and-43.69 per cent respectively and the last ten years compound

annual rate growth for cane crushed is -17.7 per cent, and sugar

production is -19.6 per cent.

Coming to the recovery rate, consistency has been observed over

the years under reference. It is clear from the fact the recovery which is

11.25 per cent during 2000-01, through experienced a decline to 10.22

per cent during 2008-09, turned out in the later years and stood at 8.83

per cent during 2009-10. It is observed, over the years under review, the

recovery rate of Andhra sugars ranged between 8.83 per cent (2009-10)

and 11.26 per cent (1994-95).

FINANCIAL PERFORMANCE

Table-5.16 reveals the profit performance of the Andhra sugars

ltd., during 2000-01 to 2009-10. It shows the sales, net profit after taxes.

Regarding the sales, company maintain consistently during the last ten

years, during 2000-01 sales was 45801.89 lakh. Highest sales during the

period are 63181.05 lakh during 2006-07, the present year during 2009-

 

213  

10 sales is 58203 lakh. The compound annual rate of growth is 4.08 per

cent. During 2000-01 net profit after taxes is ` 4380.49 lakhs and stood

high at ` 6675.65 lakh during 2009-10. Compound annual growth rate

of net profit after taxes is 7.34 per cent. Net profit margin experienced

fluctuations the year by year and during 2009-10 it is ` 11.46 lakh is

highest net margin over the years the net profit margin of Andhra sugars

ranged between ` 7.26 lakh (2008-09) and ` 11.46 lakh (2009-10).

RESEARCH AND DEVELOPMENT

Through process developmental work at the Andhra sugars Ltd.,

started from the year of its inception, a formal research and development

department was established in 1980 and is given recognition by the

Department of Science and Technology, Government of India. Through

the work carried out in the laboratory, the company could improve

continuously the quality and yields of the various products being

produced by it. In addition, it has developed the technology for the

manufacture of chlorosulphonic acid and aspirin and successfully

established

Commercial plants for its production. Recently it has also

developed the technology for the manufacture of Un-Symmetrical

Dimethyl Hydrazine (UDMH) and Monomethyl Hydrazine (MMH) with

basis process know-how obtained from Vikram Sarabhai Space Centre

(VSSC), Trivandrum. In sugarcane Development Division due to

concentrated efforts of R & D staff, it could improve upon the recovery by

introducing high yielding, rich varieties of cane in the area. The company

is screening the varieties to locate pest and disease resistant varieties in

collaboration with sugarcane breeding research institute, Coimbatore. It

stood first in the state during the last six consecutive seasons in the

matter of recovery percentage. The continuous R & D activities of the

 

214  

company have facilitated in optimizing production and process efficiency,

exploring new markets for the existing products, increased capacity

utilization of plants and improved sugar recovery.

The salaries for the employees are fixed as per the guidelines and

directions of the All India Wage Boards. Other benefits are provided as

per the bipartite settlement under the industrial Disputes ACT of 1948.

Benefits are given voluntarily by the organization. Statutory benefits are

extended under various enactments like, Employees’ Provident Fund Act

of 1952, Employees state insurance Act of 1948, Payment of Gratuity Act

of 1972, Payment of Bonus Act of 1965, Factories Act of 1948, etc.

ACHIEVEMENTS

The Andhra Sugars Ltd., is committed to its shareholders and also

other stakeholders The company uninterruptedly paid dividends on

equity shares since 1954-55 and has issued bonus shares to share

holders in the years 1970, 1974, 1982, 1991 and 1993 in the ratio of 4:5,

3:5, 3:5, 1:1, and 1:1 respectively. In fact 92.17 per cent of the exiting

shares are bonus shares the company earned for its shareholders. It has

the distinction of developing in-house R and D facility process

technologies for its chlorouphonic acid aspirin, UDMH and MMH plants

and considerably improving upon the process technology for acetic acid

and acetic anhydride plant.

It is the only sugar plant in the country that successfully operates

the diffusion system in sugar production and has the distinction of

participating in the indigenous development and production of fuels for

the Indian space programme. The fuel produced by the company is used

in India’s first indigenously built multipurpose satellite-the INSAT–IIA

and the PSLV-D2. The company has been awarded the national award for

Energy Conservation in the chlor-alkali industry for 1991-92, instituted

 

215  

by the Indian institute of marketing and management. It is perhaps bring

the only Indian industrial group to have its head quarters and

management located in rural area, which is dedicated to the development

of rural India.

Originally this plant was supplied by a Swedish firm for the

manufacture of acetic anhydride and acetic acid in the ratio of 40:60.

The company has incorporated various improvements and developed the

process to manufacture acetic anhydride and acetic acid in the ratio of

58:42, acetic anhydrides being the more valuable product. The company

has the credit of transferring this process know-how to M/s. Southern

Hydro Carbons Ltd., Udamalpet, Tamilnadu and to M/s. Hindustan

organic chemicals Ltd., (A Govt. of India undertaking ), Rasayni,

Maharashtra. The company also supplied acetic acid plant on a tunkey

basis to M/s. Sanjeevani Sahakari Shankar Karkahana, kopargaon in

Maharashtra, and has won their appreciation for the design,

workmanship and performance of the plant.

SPREADING IN THE HORIZON

The sugar industry is undergoing expansion endeavours for

diversification. Under the diversification programme, it has to supply

fertilizers to the local sugarcane growers and the farmers. A sulfuric acid

superphosphate plant is established in the year 1961 at Kovvur

enhancing the manufacturing potential of the Andhra Sugars Ltd.,

sprouting into a group. The company established caustic soda plant in

the year 1966 for the manufacture of rayon grade caustic soda, chlorine

and hydrochloride acid. The company has fabricated hydrochloric acid

plant for making hydrochloric acid from sniff gas the capacity of caustic

soda plant is increased to 14 tonnes per day and the commercial

production is started from 26-09-1980. The company installed caustic

potash and alum plants at their Kovvur units. Meanwhile, they have

 

216  

developed the technology for the manufacture of chlorosulphuric acid

established at Kovvur based on their own technology. The capacity of the

plant was increased from 5,000 T.P.A to 10,000 T.P.A with effect from

27-03-1982.

The company holds the industrials license for manufacture of

chemical plant equipment, boiling house equipment and De Smet

Andhra sugarcane Diffusers. The Andhra sugars Ltd., has the credit of

supplying one diffuser each to M/s. Doodhganaga Yedganga Sahakari

Shaker Kharkhana Ltd., Bidri, Maharashtra and diffuser to M/s. the

Etikoppaka, A.P. and one diffuser is installed in this company itself.

ASPIRIN PLANT

The Andhra Sugars Ltd., is the first Indian company who have

developed its own technology for the manufacture of aspirin, as analgesic

drug and successfully established a plant for its commercial, production

with a capacity of 500 Mts per annum and the present capacity is 1,000

Mts per annum. Out of the main raw materials used in the manufacture

of aspirin, the company is manufacturing caustic soda, sulphuric acid,

carbon dioxide gas and acetic anhydride. The company needs to procure

only phenol from outside, which is available indigenously. The company’s

product is considered to be the best in the market.

Further the company had installed another chemical plant at

Saggonda Polavaram, for the manufacture of caustic soda, HCL, and

Chlorine. The Company started the production of sodium hypochlorite

and hydrogen gas at this unit. The licensed and installed capacities of

these plants are 33,000, 10,000, 3,300 and 50 metric tonnes per annum

respectively. The company started another sugar unit at Taduvai in

jangareddy gudem mandal with a capacity of 2,000 mt/day. The present

installed capacity is 2,500 mt/day. The company stood first in the state

 

217  

of Andhra Pradesh for recording highest recovery of 11.25 per cent

during 2001-02 seasons.

WIND POWER PROJECT

Wind power project, with a capacity of two mega watts is started in

the year 1994 and it is running successfully. The initial investment for

this project is ` 10crores. This is located at Ramagiri in Ananthapur

District.

In addition, the company has developed the technology for the

manufacture of chlorosulphuric acid and aspirin successfully and

established commercial plants for their production. The company has

developed the technology for the manufacture of UDMH and MMH with

the basic process know-how obtained from Vikram Sarabhai Space

Centre (VSSC), Trivandrum.

DISTILLERY PLANT AT THE ANDHRA SUGARS LTD

Tanuku is the complex of the Andhra sugars Ltd., distillery and the

waste water generated from alcohol. Distillery is treated in an effluent

treatment plant before disposal. The effluent treatment plant is a

multistage treatment plant. The technology of M/s. Bacardi Corporation,

U.S.A (recipient of Environment production Award in U.S.A. during 1983

for the development of best technology) is obtained through. Reva plant

and it is commissioned successfully in 1987 and is operating smoothly

since then, about 14 acres of land is procured for this project and the

total capital cost is approximately ` 1.59 lakh.

 

218  

DIVERSIFICATION PROGRAMME

Under an ambitious diversification programme for supplying

fertilizers to local sugarcane growers and farmers, a sulphuric

acid/superphosphate plant is established in the year 1961. The

superphosphate is entirely fabricated and erected by the company at

much less cost. The company also established a caustic soda plant in the

year 1966 for the manufacturing of caustic soda, chlorine and

hydrochloric acid. Under an expansion project for the caustic soda plant

and to manufacture caustic soda from hydrochloric acid sniffs, the

capacity is eventually expanded to 140 tonnes per day and the

commercial production started from 26-09-1980. The company is also

holding industrial licenses for the manufacture of chemical plant

equipment, boiling house equipments and De-Smet Andhra sugarcane

diffusers.

The company is the first Indian company to develop its own

technology, which is second to none in the international scene and has

successfully commissioned an aspirin plant of a capacity of 500 tonnes

per annum. The company has received a letter-of-intent for the

expansion of the Aspirin plant capacity from 500 to 1,000 tonnes per

annum and the project is under implementation.

Under the diversification programme meant to supply fertilizers to

the local sugarcane growers and the farmers, a sulphuric

acid/superphosphate plant was established for manufacturing caustic

soda, chlorine and hydrochloric acid. In the expansion project of caustic

soda from 30 to 100 tonnes per day, it has fabricated one of the biggest

brine clarifier of 25 meters diameter with FRP lining and made number of

innovations in the caustic soda unit such as burning hydrogen gas

instead of furnace old and utilizing the waste gas in making caustic soda

flakes. It has fabricated hydrochloric acid plant for making hydrochloric

 

219  

acid from sniff gas. The capacity of the caustic soda plant is increased to

140 tonnes per day and the commercial production was started from

26-09-1980. The company has installed caustic potash and alum plants

near Kovvur units. Meanwhile, it has developed its own technology for

the manufacturing the same is established at Kovvur the capacity of

chlorosulphonic acid plant is increased from 5,000 TPA to 10,000 TPA

with effect from 27-02-1982. The company holding industrial license for

manufacture of chemical plant equipment, boiling house equipment and

De smet Andhra sugarcane diffusers. The diffusers, which work on

percolation type, are manufactured as per the designs given by M/s. N.V.

Extraction’s De-Smet S.A.Antwerp, Belgium.

Towards the national efforts on energy saving and efficient

utilization of available coal and other inferior grades of fuels, the Andhra

sugars Ltd., launched a programme for the conservation and effective

use of coal by introducing the “Fluidized Bed Boiler’’. Thereby the Andhra

sugars Ltd., is able to save 600 to 700 tonnes of per month, affecting

substantial energy saving.

The company has established efficient treatment plant at Tanuku

in the year 1987 with technical known-how from M/s. Bacardi

Corporation, U.S.A., (who have received environmental protection award

in U.S.A., during the year 1983 for the development of best technology).

In the process of efficient treatment, methane rich bio-gas is generated,

which is being used as fuel from this non-conventional source of energy

in boilers. In following a global course to procure machinery with the

view to establish a factory quickly and economically, Dr Mullapudi

Harischandra Prasad had the privilege to be accompanied by late V.

Rama Krishna, a pioneering veteran in the sugar industry of Andhra

Pradesh. Shortly, thereafter the foundation stone is laid for the factory

which has grown today into an industrial complex.

 

220  

It has developed under the esteemed guidance and leadership of

late Dr. Mullapudi Harischandra Prasad, founder director and chairman

& managing director. In the year 1952 the erection of the factory is

completed with the first crush of sugarcane and since then the

progressive growth is triggered on. Initially, an industrial license for a

cane crush of 600 tonnes per day was obtained. The company obtained a

recovery of 9.22 per cent and it is first to introduce diffusion system and

continuous centrifugal machinery in the sugar industry.

 

221  

UNIT-4: THE JEYPORE SUGARS LIMITED.

HISTORY OF THE COMPANY

The Jeypore Sugar Ltd., was incorporated as a Public Limited

Company on 29th July 1936 under the India Companies Act. 1913 and

was the first company to be registered in the then newly formed province

of Odisha. The company started a sugar unit at Rayagada, Koraput

District, Odisha with an initial capacity of 150 TCD and subsequently

expanded to 450 TCD. The company diversified into various other

activities like manufacture of industrial alcohol, Indian made foreign

liquor and ferro manganese. In the course of expansion of the company,

a separate sugar unit was established at Nagaram in Guntur District of

Andhra Pradesh. In 1958. Due to non-availability of sugar cane the unit

is shifted to chagallu, West Godavari district in Andhra Pradesh in 1961

with an installed capacity of 850 TCD in the year 1960-61 and having

licensed capacity of 1250 TCD. At present the company’s installed

capacity and crushing capacity is at about 8500 TCD.

ENTREPRENEUR’S PROFILE

The Founder Chairman Late Velagapudi Ramakrishna born on

March 4th, 1896 in the village of Bellamvaripalem village in Guntur

District. He is graduated in Andhra Pradesh and went to U.K, he

appeared for ICS and got selection. He was married to Durgamba, and

got one daughter and two sons. All children’s of Velagapudi Ramakrishna

have become successful industrialists and their names are well known to

all industrialists throughout India and abroad.

 

222  

He worked in various positions in State Government and Central

Government as under Secretary, Collector and District Magistrate, Divan

of Jeypore Estate and finally Director of Industries, Secretary to the

Indian Government. Chairman for National Tribunal, Advisor to

Industries Department, Development Commissioner and Ex. Officio

Secretary for the Madras State Government, in the year 1945. He

voluntarily resigned from the Government service in 1947 and has taken

over the administration of businesses.

Now the managing director of this organization is Smt Rajeswari

Rama Krishna. She is born in 1928, is the daughter of the great late Sri

Velagapudi Rama Krishna. She graduated from queen Mary’s college in

1945. The Jeypore sugar Ltd., has taken big strides under her

stewardship and today the company has become the biggest sugar unit

in Andhra Pradesh which manufactures sugar, ferro-manganese, alcohol,

starch. She is closely associated with KCP, Madras Aluminum Co Ltd.,

Eimco-KCP fuller (Krishna industrial corporation) Rama Krishna

industries (private) limited, V.R Textiles limited and Coimbatore institute

of technology (C.I.T., Coimbatore) and sandwich polytechnic.

SOCIAL REACH

Smt Rajeswari Rama Krishna has donated about fifty lakhs

including land in her father’s name in his birth place, Guntur for a co-

educational College and is actively participating in its functioning. She is

the president of Sri.V.Ramakrishna Memorial College, Nagaram, which

has become a model rural institution in the country today. She has put

up the V. Ramesh krishnan Junior College in Chagallu. She has also

donated liberally for the Engineering wing in the C.R.Reddy College,

Eluru. She is the chief local donor for the Men’s College, Women’s College

and Eye Hospital at Nidadavole which caters to hundreds of villages in

 

223  

west Godavari. This hospital named as Rajeswary Ramakrishnan Lions

Eye Hospital.

ACCOMPLISHMENTS

Smt Rajeswari Rama Krishna has been very active in Rotary in

Coimbatore for several years in the 50’s and 60’s. In 1957 she led a

group of 27 Rotarian’s to Srilanka on a highly successful goodwill

mission. She is also very active in guild of services, Red Cross and other

social service organization but she gradually gave up other activities and

devoted her time for the growth of industries. She is the recipient of the

Pride of Asia International Award and Global Medal for being a leading

lady industrialist in a world dominated by men at Singapore on 11-01-

1992 and she received the award from FICCI in 1995-1996 for

“Outstanding Woman Entrepreneur.

INFRASTRUCTURAL FACILITIES WITH COMMUNICATIONS, WATER,

POWER ETC

As has been explained earlier, it is a growing concern having all

facilities. It is situated on the road from Nidadavole to pangidi at distance

of 10 km from Nidadavole Railway Station on Chennai-Howrah trunk

road and two kilometers from Chennai to Calcutta National Highway

(NH-5) from pangidi. Abundant ground water is available for the purpose

of drinking as well as processing.

The company approached the sugar directorate for loan to develop

irrigation facilities to the growers by digging bore wells and installing

pumps sets. The loan has been sanctioned and after completion of the

formalities, the project of irrigation development will be implemented to

bring in additional area under sugarcane cultivation. Regarding power

 

224  

and fuel, any sugar factory generates its own power using its own by-

product bagasse as fuel. The ONGC, Krishna-Godavari basin is laying a

gas pipeline to distribute natural gas to the industries (the gas obtained

in the Krishna-Godavari basin) and in case the gas is available, the

abundant surplus bagasse can be spared to the paper industry which

has shortage of raw material.

It is a well known fact that sugar industry generates direct and

indirect employment in rural areas. As this is growing concern, the

increase in direct employment is not proportion to the expanded capacity

in view of the technological developments in sugar manufacturing

equipment. But there is enormous potential for increase in direct

employment in agriculture and other services. Economy of scales as

indicate above, there is economy in labour cost and there will be benefit

in saving power and fuel on account of increased capacity and improved

technology. The investment cost per tonnes of installed annual capacity

is considerably less than that of a new unit. The incidence of fixed cost

per unit of production will be less. Thus, there will be substantial

reduction in the cost of production of the finished product. This can be

seen from the financial projections.

The capital structure of the Jeypore Sugars Ltd., is very

conservative consisting of a paid up capacity of ` 4.5 crores with well

accumulated reserves and surplus of ` 25.4 crores. Thus, the capital

reserve ratio stands at 1:5:6. This shows the financial strength of the

company with accumulated internal resources. But the debt component

of the capital structure is ` 85.4 crores. Thus, the debt equity ratio is

2.9:1 which appears to be ideal. The total assets of the company stands

at `125.1 crores of which the fixed assets are ` 111.7 crores. Thus, the

net fixed assets to total assets ratio stands at 89.3 per cent.

 

225  

The company is providing financial assistance for repairs and

maintenance of roads and culverts for transporting the cane from

different villages to our factory with 65% contribution from factory funds.

AGRONOMIC-TECHNIQUES TO IMPROVE YIELDS

The company is increasing the per acre yield by taking-up

improved agronomic techniques like gap filling with single bud seedlings

both in plant and ratoon crop, earthing up operation, sugarcane trash

mulching and wider spacing plantation etc.

BIOLOGICAL CONTROL LABORATORY

The company is installed a bio-control lab in our factory premises

for mass production of Trichogramma sp., which is utilized in control of

ESB, INB in sugarcane crop. They have spent `15.00 lakhs for installing

the bio-control lab, they are supplying Tricho-cards for 5000 acres in our

factory area, on 40% subsidy to the cane growers.

MECHANIZATION OF CANE CULTIVATION

The company is encouraging the farmers to take up mechanization

in cane cultivation by introducing suitable implements for soil

preparation, inter-cultivation implements like power welders/tillers,

earthing up implements, chemicals and fertilizer distribution implements

and mechanical harvesting machines etc. by giving incentives for

utilizing the implements and supplying the suitable implements on

subsidy basis through the company in the interested cane growers.

 

226  

GENERAL INFORMATION OF THE MILL WITH ITS OPERATIONAL

AREA

The Government of Andhra Pradesh under Sugarcane Act 1961

has allotted 156 Revenue Villages in 13 Mandals of West Godavari and

Sitanagaram mandal of East Godavari district. The soils in the factory

area are sandy loam, alluvial, heavy clay and red loam soils. They are

quite suitable for sugarcane cultivation. In all the area most of the soils

are having drainage facilities, but in some patches water stagnation

during floods is the problem. The total cultivable area in the factory zone

is 1,16,897 hectares out of an area of hectares is under cultivation of

crops like paddy, tobacco, Chillies, Banana, Oil palm and vegitables. The

irrigated area is 91,301 hectares under bore wells and canals. The

ground water potentiality in the factory zone is very good and is being

recharged by good rainfall during the last three months. The average

sugarcane yield in the factory zone is 30 tonnes. The cane availability

during 2010-11 season is expected to be 9.0 lakh tonnes. Against the

crushing capacity of 8500 TCD.

RAW MATERIAL

The factory zone consists of the villages having the total of 9,000

hectares under cane. Ever since the factory established in 1962, the

management has taken on its head developing cultivation of one among

most of the villages in the zone by providing necessary incentives by way

of price, subsidized supplies of fertilizers, pesticides, the disseminating

improved and modern agricultural practices and technology apart from

introducing new varieties, propagating and supply of seed at free of cost

or at subsidized rates. With the benevolent and pragmatic policies

adopted steadily and more land has been brought under sugarcane

cultivation.

 

227  

It is ample testimony that this unit has been crushing more cane

utilizing full or near full capacity when the other units in Andhra

Pradesh are working for below 75 per cent capacity. The units awarded

prizes for higher capacity utilization competition by the state government

in the years1983-84 and 1984-85. The area already developed and which

the improved practices that are being adopted under a phased progamme

to get more yield with high sucrose content is sufficient to feed the unit

even after proposed capacity increase. The grower’s community will get

disappointed if the units are not expanded to the capacity to take all the

cane that is being grown in the area.

CANE DEVELOPMENT ACTIVITIES

Three-Tier Seed Nursery Programme

The company providing seed material incentive for growing seed

nurseries of improved new sugarcane varieties under three tier seed

nursery programme under the supervision of the Agrl. Staff (84 Field

staff + 12 Agricultural Officers + 2 Cane Managers and General Manager

(Cane).

Seed Saving Technology

They have introduced seedlings plantation to reduce the cost of

cultivation in sugarcane crop by 35% than the normal planting method,

which helps in reducing the seed material and labour cost. By seed

saving technology, the cane growers are saving ` 5000/- to ` 6000/- in

both seed as well as labour cost. They have given ` 10.00 lakh for

developing seed saving technology in the factory area for 2009-10

planting season.

 

228  

Seed Subsidy

The company providing seed cane subsidy of `.7000/- per one acre

for planting sugarcane crop. The total amount of subsidy for seed cane is

` 6.30 crores for planting 9000 acres during the 2009-10 planting

season.

Ratoon Management Subsidy

The company providing ` 2000/- per acre of ratoon crop for taking

up ratoon management practices like stubble shaving, malathion

drenching, gap filling with seedlings, earthing up and inter-cultural

operations. The total amount for ratoon management subsidy is ` 2.20

crores for 11000 acres of ratoon crop during 2009-10 season.

Wider Spacing Incentive

The company encouraging the cane growers for partial

mechanization of cane cultivation likes inter-cultural and harvesting

operations. For this purpose, the spacing between the rows has to be

increased. So we are encouraging the cane growers to take up spaced

plantation by giving incentive of ` 3000/- per acre.

Trash Utilisation Incentive

In factory area, the farmers had the practice of burning the

sugarcane trash after harvesting the cane, which is becoming a threat for

global warming. To change the trash burning practice, they have

introduced trash utilization incentive of ` 1000/- per acre for utilizing

the sugarcane trash for mulching or for removing the cane trash from the

field.

 

229  

Interest-Free Loan Facilities to Cane Growers

All the inputs like Organic Manure, Inorganic Manure, Weedicides,

and Pesticides etc are provided with interest free loan to the cane

growers.

Crop Loans

The Company providing crop loans to the cane growers under tie-

up arrangement with commercial banks. These loans are recovered from

the subsequent cane payments after supply of cane.

Loans for Improvement of Irrigation Facilities

The company providing term-loans to the cane growers for

purchasing PVP pipes for bore wells, which will be recovered in three

years from their cane payments. As the irrigation facilities are improved

on a long term basis, the farmers are coming forward to take up cane

plantation.

Cane Transport System

The company providing transport facilities to cane growers on

subsidy basis for supplying cane from distant villages of 25 kms and

above. We provide transport subsidy of ` 50.00 lakh to cane growers’

transporting cane from distant villages.

GROWTH OF THE UNIT

The sugar unit at Chagallu commenced crushing on 2nd December,

1931 with an installed capacity of 750 TCD and having licensed capacity

of 1,250 TCD. In view of availability of cane during 1964, scheme of

expansion is taken up for the achievement of the licensed crushing

 

230  

capacity of 1,250 TCD, and the installed capacity is raised to 1,250 TCD.

It was expanded by 1968 to 3,000 TCD. A letter of intent is obtained for

substantial expansion to 5,000 TCD, in the year 1975. During 1970s and

early 1980s the sugar industry is plagued with vicious circle of surpluses

and shortages of sugar production due to various reasons including

Government policies. Especially in the vicinity of Chagallu, good number

of khand–sari sugar mills is working in those days and there used to be

large scale diversion of cane from the registered zone of the sugar factory.

In the view of the uncertainty of availability of the raw material, the

expansion can not be taken up and the letter of intent was surrendered.

Now, from the year 1984-85, with the pragmatic policies of the

government in respect of sugar price, levy price and change of proportion

of levy and free sugar etc., the sugar industry has been recovering and

registered steady growth in general, in chagallu apart from the

government policy, the company has been providing subsidies and

incentives to encourage more and more growers to take up sugarcane

cultivation. Now with the availability of raw material, the company

wishes to undertake modernization which would result in substantial

expansion also.

The company wishes to modernize the plant and machinery to

improve productivity, quality and economize energy wherever possible in

order to attain the standards of performance prescribed by the

government and to remove bottlenecks, if any, to obtain smooth

functioning. With this in view, an endorsement to increase licensed

capacity to 3,800 TCD under press note No.2 dated 15-1-1986 of the

department of industrial development, is obtained in the year 1987.

Subsequently license has also been applied for substantial expansion to

TCD and obtained letter of intent in December 1988 and the present

application for assistance is the consequence of the same.

 

231  

The success of any sugar factory depends on availability of raw

material, i.e. sugar cane which is agro based. Therefore, availability of

adequate sugarcane supply is the primary requisite. The other

infrastructural facilities power, water, communications are already

available.

 

232  

CHART-5.5: ORGANISATION CHART-THE JEYPORE SUGARS LTD.

     CHAIRMAN &MANAGING DIRECTOR 

        Executive Director 

           Chief executive     G.M(Cane)  D.C.M(F&A)     D.G.M   

Purchase   Transport GH GenSt        Dy Manager Cane       Manager Cane I/c               I/c            I/c    I/c               (F&A)             Acct                                                                                                            

                                                                                       Clerk                Sr      Mnager    Yard  Ao         Inch       sup 

Managers   ACSDO   Clerk     Cane                              Exam                               Unid Banta FM                       ( Diy Banta) 

 Clerk        Mech      Cooks Clerks          Boys          Drivers      Boys                                          Cleaner                                                                          Boys               Public Rela&Liason 

                                                        Mol&                                                

                                                                                        

  Est Inchg            MO            H T K             Security    Welfare 

     Clerk               Comp            T K                                                    Welfare                                                                                       Sr off (EDP)                                                    Clerk                                                                                                            Sr Programmer 

                                                                                                                                                                                                                                                                                                                                                                                                                    

   L W O 

                                             Trainee                       Progranner          

                                                                                  SystAsst/Asst Prog         

                                                                                       D E O’s         

P O 

F M           Tr 

   T r 

G.M. (Factories)

Manager    Chief            Manager                                                                          Dist Engg         Engineer        (Coger)                                                                               Ma

Sr Engr   Sr Engg           J E                                                       Sr Engg    Sr Engg   Dy Manager (p)  Asst Mngr A .E            A.E              Sup          (Elec)       (Inst)     Asst Manager (p)   (QC)        A

  JE              JE           Workmen      AE              AE       Sr. Mfg.Chem.    Lab Chem. 

Sup.         Sup          Tr/App             JE               JE      Mfg.Chem     TraineesChemis

Clerk/DM Clerk                         workmen      Sup       Asst.                  Lab Boys 

Workmen   Workwomen   Sr.Engg       Workmen Tr/.App                                   Civil    Tr/App 

Sugar sales  I/C    P.S. to                                      Tracer       Maistry          

Sales  

Clerks 

Tr     Tr      Banta

        CE            Desp                    

      Steno                           Tel opr   Clerk 

 D.G.M (Elec)

Tr/.App 

           Clerk       Tr/App

D.G.M.(Process) 

Mfg.Chem            Tr/App 

H.panMan 

Pan Incharge                     Ad

Workmen        A G M 

Tr/App 

     Officer 

  AAO 

 Clerks 

D C M 

Mol&Begassee      Sales clerk  

 

G.

  

   (Tech)              

Staff&                 

workers Workers             

     

 

233  

TABLE-5.17: HUMAN RESOURCE STRENGTH OF THE JEYPORE SUGARS LTD., AS ON 31-12-2010

(Figures in no’s)

S.NO

Category (grade)

Permanent

Seasonal

Trainees

Contract App.

Daily App.

Daily total

1 2 3 4 5 6 7 8 9

10

11

12

13

Officers

Supervisors-A

Supervisors-B

Supervisors-C

Clerk-A

Clerk-B

Clerk-C

Highly skilled

Skilled-A

Skilled-B

Semi-skilled

Un-skilled

Trainees and App

29(100.0)

30(100.0)

18(100.0)

25(71.42)

12(92.30)

48(57.83)

21(40.38)

23(100.0)

85(92.39)

88(63.30)

139(63.47)

60(39.73) -

- - -

10(28.57)

1(7.69)

35(42.16)

31(59.61) -

7(7.60)

51(36.69) 80(36.52)

91(60.26) -

- - - - - - - - - - - -

319 (68.30)

- - - - - - - - - - - -

60 (12.84)

- - - - - - - - - - - -

208 (44.53)

29(100.0) (2.14)

30(100.0) (2.22)

18(100.0) (1.33)

35(100.0) (2.59)

13(100.0) (0.96)

83(100.0) (6.14)

52(100.0) (3.84)

23(100.0) (1.70)

92(100.0) (6.80)

139(100.0)

(10.28) 219(100.0)

(16.21) 151(100.0)

(11.17)

467(100.0) (34.56)

Total

576

(42.63)

306

(22.64)

319

(23.61)

60

(4.44)

208

(15.39)

1351

(100.0)

Note: Figures in the brackets indicate the percentages to respective total. Source: Office Records of the Jeypore Sugars Ltd.

 

234  

TABLE-5.18: PRODUCTS PRODUCED BY THE JEYPORE SUGARS LTD.

Station

Name of the product

Units Installed capacity

Chagallu

Janagareddigudem

Rayagada

Sugars

Molasses-by product

Industrial alcohol

Ethanol

Fusel oil-by product

Ferromanganese

/ferrochrome

Power (electricity)

Industrial alcohol

Extra Netural alcohol

Fusel oil-by

product

Industrial alcohol

Indian made foreign liquor

M Ts

M Ts

BLs (per annum)

BLs

(per annum)

BLs (per annum)

M Ts

(per annum)

MW (per hour )

BLs

(per annum)

BLs (per annum)

BLs

(per annum)

BLs (per annum)

BLs

(per annum)

8500TCD

1,20,00,000

90,00,000

18,000

12

50,00,000

30,00,000

9,00,00

Source: Office Records of the Jeypore Sugars Limited.

 

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TABLE-5.19: OPERATIONAL SCENARIO OF THE JEYPORE SUGARS DURING 2000-01 TO 2009-10

Year Cane crushed

(lakh MTLS)

Annual Growth

rate

Sugar production (lakh QTLS)

Annual Growth

rate

Sugar recovery

(%)

2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 CARG

1003861 1017552 1232830 851372 927518 1114655 1260124 1119566 583127 593633 -5.11

- 1.36 21.15 -30.94 8.94 20.17 13.05 -11.15 -47.91 1.80

1144402 1126014 1314332 921628 1075620 1224740 1395110 1213750 640042 617127 -5.98

- -1.60 16.72 -29.87 16.70 13.86 13.91 -12.99 -47.26 -3.58

11.40 1107 10.66 10.83 11.57 11.00 11.07 10.86 10.98 10..40

Source: Annual reports and office records of the Jeypore Sugar Limited.

HUMAN RESOURCE STRENGTH OF THE JEYPORE SUGARS LTD

Table 5.17shows the category wise human resource strength of the

unit. As evident from the table, the total manpower of the unit is 1,351 of

which 42.63 per cent (576) are permanent, 22.64 per cent (306) are

seasonal and 23.61 per cent (319) are trainees, and 4.44 per cent (60),

are contract apprenticeship and 15.39 per cent (208) are daily

apprenticeship, the major share of the employees are permanent. The

relationship with the staff and workers continued to be cordial during the

year. The Directors wish to place on record their appreciation of the

valuable work done and co-operation extended by them at all levels.

 

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PRODUCT MIX OF THE UNIT

Traditionally white sugar is used to be the only product of the

sugar industry but in due course of time, molasses and bagasse emerged

as the commercially unable by-products of the industry. Those two

byproducts are now effectively utilized for producing alcohol, ethanol,

power, Ferro manganese, spirit and Indian made foreign liquor, paper

etc. the Jeypore company has a diversified product mix which includes

sugar, molasses, industrial alcohol, ethane’s, power, Indian made foreign

liquor, slag dumpings and Ferro manganese as can be viewed from table-

5.18.

OPERATION OF THE JEYPORE SUGARS

Table-5.19 shows the operational profile of the Jeypore Sugars Ltd,

in terms of cane crushed, production of sugar and sugar recovery during

2000-01to 2009-10. It can be seen that the cane crushed by the factory

during 2000-01 to 2006-07 is increased but year is decreased to 593633

MTLS during 2009-10 from 1003861 MTLS during 2000-01. Annual

growth rate of cane crushed in the year 2009-10 by 2008-09 is 1.80 per

cent. The annual compound rate of growth for the decade is -5.11 per

cent.

The table also reveals the production of the sugars is also

experienced an increased to 1144402 QTLS (2000-01) and stood at

1395110 QTLS (2006-07), but last two years production is declined to

640042 QTLS during 2008-09 and 617127 QTLS during 2009-10.

Annual growth rate of sugar production in the year 2009-10 by 2008-09

is -3.58 per cent .the annual compound rate of growth of last ten years

was -5.98 per cent. The recovery performance is observed to experience

 

237  

no wide variations. It is evident from the table the recovery ratio of the

factory, during the decade under review, ranged between 11.40 per cent

(2000-01) and 10.40 per cent (2009-10). Moreover, during 2009-10,

through cane crushed and production experienced a setback. The

recovery rate is observed to be less consistent.

SUBSIDARY COMPANY

Sri Rama Distilleries limited is purchased in the year 1988 by the

Jeypore Sugars Co Ltd., and now it is flourishing well on its own after

take-over. At present this unit is producing 45 lakhs liters of ractified

spirit per year.

THE PROSPECTS OF DISTILLERIES AT CHAGALLU AND

JANGAREDDY GUDEM

The company can opt for the production of extra neutral alcohol or

ethanol or absolute alcohol based on the prices as per the market

demand and get maximum benefit as all the products can be

manufactured in our distilleries.

a) Co-generation: The co-generation project has worked continuously

and successfully during the season and generated 23916 MW of

power. The company took a strategic decision to modify the boiler

to use coal as alternative fuel at a cost of ` 6 crores at chagallu.

This will enable the company to process imported raw sugar in

case of shortage of sugar cane. Moreover the power plant can feed

power to the grid throughout the year increasing the turnover.

b) Electro metallurgical division: The lease in respect of the

ferromanganese plant has expired in January 2007. The

ferromanganese/ ferrochrome products market has considerably

 

238  

picked up and the price of the final products are good. Hence, the

company is actively considering the revival of the ferromanganese/

ferrochrome unit in the due course.

c) Distillery division at Rayagada: The operation in the IMFL

bottling unit during the year is satisfactory. The demand for the

products is on the rise. The company is taking steps to increase

the production substantially and to introducing one or more new

varieties.

NEW SUGAR UNIT AT POTHAVARAM

The new sugar mill project at Pothavaram is being set up on 123

acres of land. Is complete in all respect but for some balancing

equipment and other final face of start up. The company is confident that

it can commence operation in the ensuring sugar season for the year

2010-11.

 

239  

TABLE-5.20: FINANCIAL PERFORMANCE OF THE JEYPORE SUGARS LTD., DURING 2004-05 TO 2009-10

(` in lakhs)

Year Turnover/sales Net profit

after taxes Annual

growth rate Net profit margin

2000-01 1900.30 1801.37 - 9.48 2001-02 20437.17 3927.68 118.04 19.21 2002-03 22934.97 7321.96 86.42 31.92 2003-04 21371.08 6591.67 -9.97 30.84 2004-05 18100.14 1753.73 -73.40 9.68 2005-06 25098.80 32143.34 83.28 12.80 2006-07 25658.14 1125.65 -64.98 4.38 2007-08 21151.11 6067.96 439.0 28.68 2008-09 18696.36 2991.32 -50.70 15.99 2009-10 24735.24 1924.92 -35.64 7.78 CARG 5.34 1.56

Source: Office Records of the Jeypore Sugars Ltd.

FINANCIAL PERFORMANCE OF THE COMPANY

Table-5.20 reveals the profit performance of the Jeypore Sugars

Ltd., during 2000-01 to 2009-10. It shows the sales, net profit after

taxes. As evident the sales of the company has been consistently

increseaing during the last ten years. During 2000-01 sales is

` 19000.30 lakh. Highest sales during the period is ` 25658.14 lakh

during 2006-07 and during 2009-10 the sales is at ` 24735.24 lakh.

Over the last six years ending with 2009-10 the compound annual rate of

growth is 5.34 per cent. Net profit after taxes during 2000-01 stood at

` 1801.37 lakh. In this period highest net profit after taxes stood at `

32143.34 lakhs during 2005-06 and during 2009-10 net profit after

taxes is ` 1924.92 lakhs. The compound annual growth rate is of net

profit after taxes is 1.56 per cent. The net profit margin experienced

fluctuations over the years. During 2002-03 is at the peak of ` 31.94

lakhs and during 2009-10 it was ` 7.87 lakhs finally it shows the

increasing turnover and net profit after taxes every year.