Sugar mill confident to repair fire damage with own funds

VELLORE: The Vellore Co-operative Sugar Mills has enough funds to meet repair expenses amounting to Rs 1.50 crore to set right a portion of the conveyor belt gutted in fire recently, mill Chairman M Anandan said.

Stating that workers were still engaged in estimating damages, he said insurance companies have proposed to bear only around 50% of the losses. “As we are stable financially we plan to undertake repair works at the earliest. At least five companies have submitted their proposals till date,” he said. Repairs are set to be completed well in advance of the next crushing season which is expected to begin by November.

Meanwhile the mill is banking on its existing sugar stocks amounting to 15,000 metric tonnes. The co-operative sugar mill’s cash credit-position is comfortable with 15% stocks available. As it is the central government which lifts stocks, they usually do so at the rate of 10% of existing stocks at one time, Anandan said. The current stocks are worth Rs 7 crore, he added.

Similarly, the mill has a stock of 8,000 tonnes of molasses to tide over any crisis, Anandan said. “Knowing that sugar mills will need funds to pay farmers for the cane provided, distilleries have formed a cartel and are not lifting stocks in a bid to lower prices. But we plan to maintain molasses stocks as its price which was Rs 8,000 per tonne in February-March has now skyrocketed to Rs 11,000 per tonne. When distilleries approach us they will then have to pay the prices we demand” Anandan said.

Tangedco also owes the mill a whopping Rs 39 crore for power exported to the state grid from the mill’s cogeneration plant.