Bangalore, Mar 12: Sri Chamundeshwari Sugars (SCS) is planning land acquisition and diversification into agencies for tools and equipment, automobiles and energy even as its losses have plummeted to Rs 5.34 crore for the previous fiscal, the results of which have been announced recently.Sources said the company is planning to acquire plantation and forest land and hill slopes for horticulture development during the current fiscal. The aim is to carry out food processing activities, facilitating the development of bio technology and tissue culture.
SCS is also planning to diversify into aquaculture. Developing wind energy farms is also high on the cards. It has chalked out plans to deal in machinery and equipment related to the sugar industry and to the thermal, hydro and renewable energy plants.
These plans are going to come up for approval at the company's forthcoming annual general meeting on March 19.
SCS has been recording losses for two consecutive years. The company extended its financial year 1995-96 to an 18-month period during which it posted a net loss of Rs 11.72 crore. During the fiscal beginning September 30, 1996 to September 30, 1997, the company posted a net loss of Rs 5.34 crore and a total income of Rs 40.44 crore against the previous year's figure of Rs 88.91 crore. The expenditure stood at Rs 22.66 crore compared to Rs 68.29 crore during the previous fiscal. Senior company officials said the firm received a setback owing to poor cane harvest resulting in lower crushing. The closure of the Visveswaraiah canal, a main source of irrigation, led to the lower harvest. The canal has opened since July 1997.
The company is projecting higher harvest and crushing during the current fiscal. The officials were unwilling to comment on how the company proposes to finance major diversification plans for which it is seeking shareholders' approval. SCS is already burdened by several long-term and short-term loans coming up for repayment. Sources said SCS has taken a $4million foreign currency loan towards working capital requirements from the Bank of Baroda, a rupee term loan of Rs 3.75 crore from IFCI, a medium term rupee loan of Rs 5 crore from IDBI, a term loan of Rs 3.50 crore from ICICI and another corporate loan of Rs 4 crore from IFCI. The repayment burden coupled with a depletion of reserves reveals that the company is in poor health and may not be able to shoulder the burden of expansion.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
