Home Interviews Mukesh Kumar -Executive Director Vishwaraj Sugar Industries Ltd

Mukesh Kumar -Executive Director Vishwaraj Sugar Industries Ltd

by Sumit Maru - Sep 21, 2021
Mukesh Kumar -Executive Director Vishwaraj Sugar Industries Ltd, Interview, KonexioNetwork.com

Vishwaraj Sugar Industries (VSIL) has an integrated sugarcane based professionally managed unit producing sugar, power, spirits (including  industrial spirits and ethanol) and compost. The production facility is located at Belgaum in North West Karnataka. VSIL is promoted and managed by Katti family. 

  1. Can you please take us the journey of the business?

Vishwaraj Sugar Industries, Incorporated in the year 1995, is an integrated sugar and other allied products manufacturing company operating in Belgaum District in Karnataka, which is designated as one of the “High Recovery Zones” for sugar production by Government of India. The company operates with licensed crushing capacity of 11,000 TCD. In addition to sugar, the company also has distillery capacity of 100,000 litres per day and vinegar manufacturing capacity of 70,000 liters per day. The Company is also engaged in the generation of Power from Bagasse, a by-product of sugar industry, for captive consumption as well as sale to the grid. 

  1. Why you are focusing on pharmaceutical companies as your clients?

The company has been supplying sugar to the major sugar consumers including biscuits, confectionery, and beverage manufacturing companies. Moving up from a commoditized business to value-added products, the company is stepping up the value chain in terms of produce and end-user industries, which essentially means higher price realization per unit of output. The company focuses on pharmaceutical companies and have mission to boost the share of pharma grade sugar as price realization is more than the sugar produced by sulphitation process and the refined sugar. Pharmaceutical-grade sugar is the purest sugar. It does not contain pathogens or heavy toxic substances such as lead, arsenic, mercury, etc. and is free of bacteria.

  1. Can you pls explain more of your ethanol business?

Yes, we are focusing on our ethanol business too. For ethanol segment, the company is moving up in value chain to enhance client base from Oil Marketing Companies (OMCs) to pharmaceuticals, health supplement, beauty and personal care as it garners higher realization. The company has already achieved and delivered 99.9% benchmarking the best as per international standards. The ethanol produced by us confirms to US FDA norms and we are looking to expand the capacities in coming years.

  1. Can you please throw some light on future growth strategies? 

We are moving up in value chain and therefore we are focusing on value added products which fetch us higher realization. We are going to start manufacturing pharma grade sugar. Pharmaceutical sector shall be our focus area even for ethanol. Our 99.9% graded ethanol can be used in preparation that can be injected into the body or bloodstream, in laboratories for sterilization and decontamination. It can also be used for skin and surgery disinfections, production of APIs, sensitive pharma synthesis, blood plasma functioning, and as a solvent and preservative in pharmaceutical preparation. We are enhancing our ethanol capacity in coming years.

  1. Please brief us about your capex plan?

We are upgrading automating our plants. We are enhancing our fermentation efficiency in distillery to gain high yield at no additional costs. We are in the process of enhancing our ethanol capacity via brownfield and greenfield expansions. The company is investing ~ Rs 25 crore in process engineering and improvisation backed by plant upgradation for achieving the desired quality levels and meeting standard requirements laid down by USFDA for producing pharma grade sugar. This will also help us in saving Rs 80-90 crore investments for sugar refinery facility. The process engineering will also aid in saving costs on stream, power and chemicals making it more competitive.

The company plans to set up a brownfield ethanol production facility of 150,000 litres per day over the existing capacity of 100,000 litres per day to increase total production to 250,000 litres per day at an estimated costs of Rs 150 crore. The funding will be from mix of internal accrual and debt and the facility will be fully operational in FY2025. The company also plans for green field expansion for which 110 acres of land is under acquisition process. The total outlay would be Rs 250 crore to setup ethanol distillery with total capacity of 250,000 litres per day. Phase I with capacity of 100,000 litres would be operational by FY2025 and second phase of 150,000 litres would come on stream by 2027.

  1. Can you detail us about your leasing IML facility?

The Company used to manufacture Indian Made Liquor (IML) which has been stopped in 2020 when distillation capacity was enhanced and our focus moved towards manufacturing anhydrous ethanol for OMCs. The company has leased the IML facility, which will fetch INR 50-60 lakhs in FY2022, INR 1.5 crore in FY2023, and about INR 2 crore in FY2024 in the form of lease rentals.