KPR Sugar and Apparels is expanding its sugar-cum-ethanol business by investing Rs. 500 crores for setting up a new sugar mill and it is expected to be completed within a period of 10-12 months.

The fund will be a combination of equity and debt and the new sugar mill will have capacities - Sugar of 10,000; TCD Power of 47.50 MW and Ethanol of 230 KLPD.

In the recent times, the structural changes happening in sugar business like MSP for sugar, Ethanol augmentation scheme for setting up of Ethanol plant with 50% interest subsidy on interest paid for Ethanol term loan availed from banks, increase in Ethanol blending in petrol and revised Ethanol prices, encourages KPR to go for expanding its sugar business.

In the new unit, the company is going for higher Ethanol capacity to increase revenue and profitability. The company is proposing to convert 30% of sugarcane crushed into Ethanol during the season and during off-season the focus is to use molasses to produce Ethanol so that the entire plant will be run with its own sugar juice and molasses it produces.

This fully integrated sugar plant will yield higher EBITDA and profitability. The proposed plant is a wholly owned subsidiary of KPR Sugar and Apparels Limited to avail the new tax benefits announced by the government.