Bajaj Hindusthan sets up subsidiary in Brazil
06 Nov 2006
Mumbai:
Bajaj Hindusthan Ltd has set up a wholly owned subsidiary,
called 'Bajaj Internacional Participators Ltd' in Brazil,
to take up sugar and ethanol business in the world's largest
sugar producing nation, the company said in a filing with
the Bombay Stock Exchange (BSE).
Bajaj Hindusthan is learnt to have initiated the process
for acquiring a sugar factory in Brazil. Its merchant
bankers are actively scouting for a suitable target there.
The company has earmarked an investment of around $500
million for inorganic growth in that country.
The
Shishir Bajaj group flagship manufactures sugar and its
allied products and cement. The company recently invested
in a new sugar mill with an eye to emerging as the leader
in sugar industry.
Incorporated in 1931 at Mumbai, Bajaj Hindustan is one
of the largest producers of sugar in north India. The
company is currently engaged in the production of sugar
and industrial alcohol, with sugar plants at Gola (capacity
9,000 tcd) and Palia (5,000 tcd) in the cane-rich area
of Wstern Uttar Pradesh. The alcohol division has an installed
capacity of 25,000 kilolitres per annum.
BHL is planning to set up four sugar mills in the traditional
Balrampur stronghold of Estern Uttar Pradesh. The fresh
investment of almost Rs800 crore will be funnelled through
its subsidiary Pratappur Sugar Mills. Future investment
by the Bajaj Hindusthan group in eastern UP is also likely
to be made through Pratappur Sugar.
Bajaj Hindustan will be setting up four new mills in Eastern UP, including one in Barabanki, one in Gonda and two in Basti district. All these mills will be ready for crushing sugarcane by October '07. Pratappur's existing factory of 3,500 tonnes crushed per day (tcd) is being expanded to 6,500 tcd. Together this will ensure that Pratappur has a total capacity of around 41,000 tcd, along with a 160 kilolitre distillery. BHL acquired Pratappur in September '05 from the Kanorias.
The
company's foreign borrowings of $380 million raised through
the GDR and FCCB route between May 2005 and January 2006
will fund the operations in Brazil. The company is awaiting
the end of the current bearish trend in international
sugar prices to firm up investment plans.
