DCM Sugar

active

Headquartered in Delhi, India, DCM Shriram Limited (“DCM” or the “company”, https://www.dcmshriram.com/) is a leading business conglomerate with following strategic business units (SBUs) (apart from Sugar manufacturing, which is described separately): (a)   Chloro-vinyl: manufacturing of Caustic soda, Poly-vinyl Chloride (PVC) compounds, Chlorine, PVC Resin and Calcium Carbide with manufacturing facilities in Kota (in Rajasthan) and Bharuch (in Gujarat).(b)   Plastics: This is an integrated business covering manufacture of PVC resins and Calcium Carbide. It mostly focusses on the B-to-B segment, catering to industrial users. The company’s total manufacturing capacity is 112,000 TPA Calcium Carbide. A 40 tonnes per day PVC plant is under implementation at Kota and is expected to start in 2020.(c)   Agri-inputs: (i) manufacturing of Urea (at the facility in Kota); (ii) Seeds, Pesticides, Soluble Fertilizer, Micro-nutrients and bulk fertilizers (SSP) (fertilizer manufacturing at Kota) and (iii) bioseeds for India (key crops such as cotton, corn, paddy and bajra), Vietnam. Indonesia and Philippines (for Corn). (d)   Cement: company has a cement plant in Kota (capacity 0.4 million tonnes per annum), which is mainly run based on the waste generated from the carbide facility. (e)   Fenesta Building systems: Fenesta is one of India's largest windows and doors company, and specializes in design, manufacture, installation and service of precision-engineered, 100% customised UPVC windows and doors and has presence in over 200 cities in India. The manufacturing/fabrication facilities are at Bhiwadi (in Rajasthan), Mumbai (in Maharashtra), Hyderabad (in Telangana) and Chennai (in Tamil Nadu).(f)    Hariyali Kisaan Bazaar: The activities included fuel sales only but the company plans to shut-down the operations. The number of fuel outlets have been reduced from 32 (last year) to 23, presently. The company had revenues of nearly US$1 billion and is listed in India on the National Stock Exchange and the Bombay Stock Exchange.  DSCL Sugar, entered the sugar business in 1997 and currently has four facilities (all in Uttar Pradesh) with total installed capacity of 38,000 tonnes of cane crushed per day (TCD) with around 8 million tons of cane crushed in a year: (a)   Ajbapur (in Lakhimpur Kheri district, referred to as “the Ajbapur facility): 11000 TCD, 55 MW bagasse-fired cogeneration power plant (CPP) (three turbines – 7.5 MW+20 MW +27.5 MW and three boilers – 2 nos. 60 tons per hour (tph) each and one of 135 tph).; (b)   Rupapur (in Hardoi district): 6500 TCD, 8.5 MW CPP; (c)   Hariawan (in Hardoi district, referred to as “the Hariawan facility”): 8000 TCD, 25 MW CPP (two turbines – 12 MW+13 MW and two boilers of 60 tph each) and a 160 kL/day distillery (operational since Jan 2018) & 6.2 MW Power plant; and (d)   Loni (in Hardoi district): 8,000 TCD, 25 MW CPP (two turbines – 12 MW+13 MW and two boilers of 60 tons per hour (tph) each). All facilities have CPPs, based on bagasse, a sugar by-product and have an installed co-generation capacity of 119.5 MW, out of which the company supplies some renewable energy to the national grid and the rest is for captive use. The company sources cane from over 200,000 farmers (within 50 km of each of the facilities).  To meet the increasing demand, the company is planning an expansion (“the project”) involving (a) incremental crushing facility of 5000 TCD at its existing facility at Hariawan to increase its total capacity to 13000 TCD; (b) installation of cogeneration capacity of 30 MW (with a boiler of 150 tph), with the flexibility to operate in off-season in the event of surplus bagasse, at Hariawan facility; and (c) installation of a new distillery with a capacity of 225 kL/day at Ajbapur facility, expected to be operational by December 2019, which will include a power plant of 12 MW. The proposed investment is an A-Loan of up to INR 2,500 million (~US$35million) to finance the above expansion.  DCM is a long-term partner and existing IFC investment and advisory client since 2005. IFC processed has processed four investment projects over this period including (a) DCM consolidated (#23385, in 2005); (b) DSCL II (#24732, in 2006, mainly for the Sugar business); (c) DSCL Bharuch (#27161, in 2008, for the Chlor-alkali business) and; most recent and active investment, (d) DCM Bharuch II (#36511, in 2016). Also, DCM is running an advisory engagement with IFC (and other partners) i.e. Sugar Climate Smart Agri Advisory Program for promotion of good agricultural practices under climate smart agriculture, promotion of efficient water-energy farm practices/techniques, smart land use through mechanization (agri-tech service providers), & ICT solutions targeting around 25,000 small farmers. Over the years, the advisory engagement covered about 40,000 farmers around DCM facilities.