Rural demand picking up, expect sugar business to be stable: DCM Shriram

DCM Shriram expects the sugar business to be stable this year, Ajay S Shriram, chairman and senior managing director, told CNBC-TV18 on July 22. He added that demand in the rural areas is picking up.

Shriram’s comments come days after the company reported good earnings for the June-ended quarter driven by the chemical segment. However, growth is limited due to the weak sugar segment.

“Demand in the rural area is picking up and the government has also done a lot of purchasing and given money directly into the bank accounts of various farmers. So that’s giving liquidity in the hands of farmers. Therefore, this year will be a stable year on the agriculture front, sugar is expected to be stable in the coming seasons because planting is satisfactory,” said Shriram.

Speaking about the business, he said the firm is putting up an additional 120,000 litre per day of ethanol capacity, which can be based on any grain or molasses coming from the sugar industry. It initially plans to use broken rice, which Shriram said is abundantly available in the area around the factory.

“So we will be using that and put up 120,000 liters per day plant which will be commissioned in 100-12 months from now,” he added.

For the entire management interview, watch the video