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EID Parry & Cargill plan JV,
to build sugar refinery in Kakinada April 24, 2006: The Murugappa Group owned EID Parry (India) Ltd and Cargill International S.A. have announced their plans to enter into a joint venture to set up a port-based stand-alone sugar refinery in Kakinada, Andhra Pradesh. The Murugappa Group has a significant presence in Andhra Pradesh through its companies, Coromandel Fertilisers, Godavari Fertilisers and Chemicals Ltd and Tube Investments' Diamond Chain business.
Mr. A. Vellayan, Vice Chairman, EID Parry, said, "Parry pioneered sugar production in India and is one of the top three players in the Indian sugar industry. Cargill is a dominant player in the world sugar market in sourcing, marketing and international trading, besides extensive expertise and networks. Parry is very strong in domestic sugar operations, has port based infrastructure and power generation experience. The refinery will be a world class facility with highly competitive conversion costs. This, combined with Cargill's strong reputation, global experience of sugar, its position as the single biggest trade house and capabilities in risk management, will provide the dual advantage of sourcing raw sugar and exporting refined sugar at competitive rates." Comments Mr. Jonathan Drake, head of Cargill's global sugar business: "Cargill is one of the largest sugar traders in the world, with more than 11 million tons being physically traded every year. We are a 141 year old company, and like Parry, a highly value driven, professionally managed corporation. Parry has a strong experience base and significant presence in the Indian sugar domain, and has the appropriate culture fit with Cargill. The refinery in Kakinada will add considerable strategic strength to our operations in this region and we will leverage our expertise in supply chain and risk management to support the new enterprise." The refinery will bring in considerable net foreign exchange earnings to tune of Rs. 150 crore a year into the country. Increased utilisation of the Kakinada port, power export and significant economic benefits to the local and regional areas of Andhra Pradesh are expected to arise out of the refinery operations. About EID Parry (India) Ltd The company maintains its position as the largest exporter of sugar from India since 2001, and is also among the largest importers of raw sugar into the country. It has an enviable track record of being a pioneer in the sugar industry and is among the lowest cost producers in the country. Its integrated sugar complexes, R&D activites, farmer relations, technology adoption in the field and factory and growing customer base are facilitating accelerated growth. With the recent commissioning of its 18 MW cogeneration power project at its Pudukottai sugar factory, the company now has more than 50 MW of cogeneration power capacity. About Cargill: Cargill Sugar is based in Geneva, Switzerland, and a total of 200 commercial people are employed worldwide. These people are located in 16 countries and in addition, business is conducted through other Cargill offices worldwide. The division is involved in the origination, financing, freighting, and marketing of raw refined sugar & ethanol. Cargill Sugar is involved in domestic markets in the former Soviet Union, the Middle East, South America and Asia. Cargill operates Bulk & Bag sugar loading facilities in Guaruja, where it is currently the largest shipper of Raw Sugar from Brazil. Cargill manages toll refining and/or storage/distribution programs in over 10 countries for distribution locally and/or onwards to re-export destinations. The company also manages existing investments in joint ventures in sugar refining (Brazil) and milling (Mexico) and recently announced its investments in new and large scale sugar refineries in Louisiana, USA and Homs, Syria. For further information, please contact: EID Parry: D. Kumaraswamy Chandrika Raman Cargill: Geraldine O'Shea Francis De Rosa
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With
an ultimate capacity to produce one million tons of refined
sugar per year, this refinery will be the largest in the South
Asian region. The joint venture will be setting up the refinery
close to the Kakinada port. The refinery will be a processing
operation, importing the entire raw material, raw sugar, adding
value by refining it, and exporting its production. It will
have an integrated cogeneration system of about 38 MW capacity
to take care of its steam and power requirements. Surplus
power from the plant, if any, will be exported to the grid.
EID Parry will hold 51 per cent and Cargill 49 per cent in
the joint venture, which is being structured as an export
oriented unit (EOU) or located in a special economic zone
(SEZ). The investment is estimated at Rs. 325 crore (about
USD 72 million). The plant is expected to be commissioned
by December 2007.
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