Highlights of the meeting

The sugarcane crop acreage under the command area of Vuyyuru plant stand reduced to 16500 hectares compared to 22000 hectares in the corresponding previous period. Similarly for the Laxmipuram plant the acreage of sugar cane crop was down to 3950 hectares compared to 6500 hectares in the corresponding previous period. Consequently the cane crushing for the sugar season 2008-09 is expected to be down by at least 20%.

Currently the SMP based on recovery for Vuyyuru plant is Rs 980/ tonne. And its Rs 880/ tonne for the Laxmipuram plant. The company currently pays Rs 1100/ tonne for Vuyyuru plant and Rs 1060 per tonne for the Laxmipuram plant.

Recovery is largely based on climatic conditions during the crop period especially in the months of July-Oct of a year, a period prior to harvesting, and the care the farmers take during the crop period apart from other natural factors. Moreover the influence of seawater is also higher in Laxmipuram plant as the command area is close to sea affecting the recovery of laxmipuram plant compared to Vuyyuru plant.

The company is augmenting the production capacity of calcium Lactate and Mycorrizha. The capacity of Mycorrizha is to be expanded from 350 MT to 1400 MT in first phase. This will result in incremental sales revenue of Rs 6-7 crore in current fiscal and a PAT of Rs 2-3 crore.

EMCO KCP, the Engineering subsidiary is expected to improve its performance the company‘s turnover is expected at Rs 30-35 crore for current fiscal with a PAT margin of 10%.

The company’s distillery has flexibility to produce Alcohol, Denaturalized alcohol, Extra Neutral Alcohol and ethanol with a capacity of 50 KLD. With molasses prices shooting up to 4000-6000/ tonne up from Rs 550/ tonne net of duties earlier, the company is not finding ethanol production, which gives a realization of RS 21.50 a litre, remunerative. Moreover the state government of AP always encourages sale of potable alcohol rather than ethanol as the former fills the coffers of the state government.

The company does not have cane arrears. The closing stock as end of Aug 2008 is 3.2 lakh quintals.

The company expects revenue of Rs 1.5 crore from carbon credit every year from its cogen plant.

Income from cogen plant is completely exempted from income tax for the 10 years out of first 15 years. The cogen plant has completed 3 years of operation and the company has not claimed the exemption so far and is to take claim here after.