Balrampur Chini plans to increase PLA plant capacity in Uttar Pradesh by raising capex to ₹2,850 crore

Balrampur Chini Mills, one of the largest integrated sugar manufacturing companies in India, has decided to increase the capacity of its proposed polylactic acid (PLA) plant in Uttar Pradesh from 75,000 tonnes per annum to 80,000 tonnes per annum, raising the project’s gross capital expenditure to ₹2,850 crore.

The company’s board had approved a capital expenditure of ₹2,000 crore for the greenfield PLA plant in February last year, based on conceptual planning.

“The board has approved higher capacity of PLA project optimised from 75,000 TPA to 80,000 TPA with a revision in the project’s capital expenditure from ₹2,000 crore to ₹2,850 crore (gross). The net capex of the project will be ₹1,750 crore post expected capital subsidy of ₹1,100 crore as per UP Government scheme,” Balrampur Chini Mills (BCML) said in a stock exchange filing on Friday.

“This higher investment is determined after detailed engineering including on account of the increase in capacity of the plant from 75,000 TPA to 80,000 TPA with lower conversion cost,” the company said. The revised capital expenditure will be funded through a mix of ₹1,650 crore in debt and ₹1,200 crore from internal accruals.

Global benchmarks

Vivek Saraogi, Chairman and Managing Director, BCML, said progress of the PLA project remains on-track as per schedule. “Uttar Pradesh Government’s pioneering bioplastic policy strengthens the viability of our PLA project by offering an attractive incentive framework,” Saraogi said.

Avantika Saraogi, Executive Director, BCML, said the PLA biopolymer plant sets two global benchmarks — first to produce PLA from sugarcane at the same manufacturing site and also the first PLA plant operating on 100 per cent renewable energy.

“With cutting-edge technology and industry-leading partners, we are driving efficiency and performance. Our goal is to lead India’s biopolymer revolution and make Balrampur Chini Mills the market leader. This PLA venture is risk diversification in the end so that the company has more possibility to maximise the value stream,” she said, adding the company would like to remain as the first mover and sizeable player in the Indian bioplastics market.

Q3 net up

Balrampur Chini Mills on Friday reported around 4 per cent year-on-year increase in its standalone net profit to ₹62.73 crore for the third quarter this fiscal from ₹60.31 crore for the same period last fiscal, driven by higher profitability from improved margins of the sugar segment.

The company’s revenue, however, fell around 3 per cent to ₹1,192.15 crore during the period under review against ₹1,230.39 crore in the year-ago period. The revenue in Q3FY25 was hit by challenges faced by the distillery segment due to lower alcohol recovery in the juice route.

“Cane crushing during the quarter was 10.4 per cent higher than during the same period last year; however, sugar recovery remained lower by around 48 basis points due to adverse weather conditions. Notably, our decline in recovery was the lowest among mills in eastern UP,” said Vivek Saraogi.

The company said the export quota of 1 million tonnes for the ongoing season has strengthened the domestic sugar prices, which are expected to remain robust in the medium term.