Mumbai: Hyderabad-based GMR Industries Ltd, which is the agricultural business arm of infrastructure major GMR Group, has outlined plans to invest Rs800 crore ($200 million) in new projects over the next three years.
GMR Industries main lines of business are sugar production, and allied products such as co-generation and distillery. The company is mulling a Rs250-crore rights issue by the end of June to part fund its projects, with the remaining funding coming through debt.
Managing director R Ramakrishnan has said that the investments include Rs450 crore for acquiring a sugar plant in Raibagh and for the expansion of another sugar plant in Ramdurg in Karnataka. GMR's 3,500 TCD (tonnes crushed per day) green field sugar complex in Haliyal in Karnataka has been commissioned, having been built with an investment of Rs340 crore.
GMR Industries is also setting up a plant to produce medium density fibre board at Ramdurg in Belgaum district. The plant will have a capacity of 50,000 cubic metre of MDF board per annum, with the factory using bagasse from its sugar mills as a raw material. GMR would use this MDF board for internal consumption in its infrastructure company, and also market it in the domestic market within India.
GMR Industries has taken over a 2,500 TCD semi-finished co-operative sugar plant in Ramdurg, on a 25 year lease, and expects to start operations there October 2008. The board of the company has also approved the acquisition of Alagwadi Brajeswar Sugars Private Ltd in Raibhagh, which holds a license for a 2,500 TCD sugar plant that will start operations form the 2010 crushing season.
Ramakrishnan said that the company's profit declined on account of depressed prices, and sales were impacted to the tune of 140,000 quintals because of the non-availability of sugarcane. Calling it a ''challenging time for all sugar companies in India due to depressed prices'', Ramakrishnan said that farmers were switching to other crops because of the low minimum support price for sugarcane.
Ramakrishnan has replaced Dr V Raghunathan as managing director of the company. Dr Raghunathan has moved on to shoulder responsibilities focusing on GMR Varalakshmi Foundation.
The company has decided to shift its registered office to Bangalore from Hyderabad, as most of its projects are located in the state of Karnataka.