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Tuesday, May 28, 2024
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Temasek-owned Olam to sell Maharashtra Sugar plant to Wilmar-Renuka for Rs 350-500 crore

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Olam International, controlled by Singaporean state investor, Temasek Holdings is in advance talks with Indian sugar maker Renuka-Wilmar to sell its plant in Maharashtra for around Rs 350-400 crore as part of getting out from non-core business verticals.The transaction is part of Olam’s strategic decision to exit from Sugar business globally, multiple sources with knowledge of the matter told ET.

“Both the companies are known to each other for sometime. The bilateral negotiations are at an advanced stage now. From the part of Olam, the deal is more of strategic in nature as part of its announced plan last year,” the source said.

The plant, situated in Kolhapur, has a crushing capacity of more than 6000 tonnes per day. Olam bought this plant in 2011 from Hemarus Industries for about $74 million including a cash payment of $8 million and assumption of around $66 million debt.

When contacted, Wilmar spokesperson decided to comment while mail sent to Olam did not elicit any responses till the press time.

Olam International is a global integrated supply chain manager and processor of agricultural products and food ingredients. However, in 2020, it sold its stake in Indonesian sugar joint venture Far East Agri to Mitr Phol Sugar Corporation to exit from Sugar business. In 2019, Olam had announced that it will exit from sugar, fertilizers, rubber and wood products within a span of six years. Olam has two sugar mills in India with a capacity to crush 1 million tonnes per annum.

For Renuka-Wilmar, the transaction will enhance their sugar crushing capacity from the current 37000 tonnes to 43000 tonnes per day. After Wilmar took over the controlling shareholding, Renuka-Wilmar has been cleaning up their balance sheet and enhancing capacity. Renukas’ is one of the first mills in the country to be fully forward integrated into distillery (using molasses, a by-product of sugar) and co-generation (based on bagasse) operations, according to rating agency ICRA.

Limited (SRSL) mainly manufactures fuel-grade ethanol that can be blended with petrol. SRSL’s distillery capacity stands at 720 KLPD spreads across three locations in Karnataka. The company has a total co-generation capacity of 567 MW, with a total exportable surplus of 268 MW.

The above news was originally posted on economictimes.indiatimes.com

Aabkari Times Editorial Teamhttps://aabkaritimes.com
Aabkari Times is a monthly news magazine on Liquor, Excise and Alcohol allied industry; being published since 2009 by the expertise of retired excise dept. associates and alco-bev industry professionals as our editorial team. Our magazine contains different new alco-bev strategic and new brand launch articles as well as news on recent govt. policies, trends on alcohol industry and other important data relevant to the distilleries and industry at the mass.

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