India's largest sugar company Bajaj Hindusthan Ltd on Wednesday announced its diversification into power business with plans to set up five plants having a total capacity of 400 MW at an investment of Rs 1,600 crore (Rs 16 billion).
At present, the company generates 430 MW using bagasse, of which 340 MW is for captive purpose while 90 MW is sold to the state grid, a company spokesperson said.
The five new plants will be coal-based and would be for commercial purposes, through which the company expects revenues up to Rs 1,200 crore (Rs 12 billion) annually, he added.
In a filing to the Bombay Stock Exchange, Bajaj Hindusthan said the company's board approved the expansion of power generation capacity by 400 MW by way of setting up five new coal-based power plants of 80 MW each.
"These new projects are expected to be completed within a period of around 20 months at an aggregate project cost of around Rs 1,600 crore," the company said.
These coal-based power plants would be set up on land adjacent to the firm's existing sugar factories located in Uttar Pradesh.
With these new power plants, the power generating capacity of the group will increase to 830 MW from 430 MW. Bajaj Hindusthan has 14 sugar plants with cane crushing capacity of 1,36,000 per day. It had produced 700,000 tonnes of sugar in 2008-09 season ending September. The company's shares today surged 4.53 per cent to close at Rs 222.80 on the BSE.
As per Bajaj Hindusthan's plans, the five new power plants will come up at Barkhera, Maqsoodpur and Khamberkhera (all in central UP) and Utraula and Kunderki (eastern UP).
While the company already has land to set up these plants, it has also received technical offers from at least eight reputed equipment suppliers.
In order to ensure supply of coal for the power plants, the company has submitted applications to coal ministry for coal linkages.
Besides, it is also negotiating for long term coal supply from overseas along with scouting for coal mine acquisitions.
Bajaj Hindusthan will hold talks with the UP government and UP Power Corporation Ltd within a months' time for discussing draft agreement on power purchase.
