RED HERRING PROSPECTUS Dated August 24 ... - Globus Spirits

INFRASTRUCTURE FACILITIES
I. RAW MATERIALS
India is the largest producer of sugarcane in the world and sugar industry is the second
largest agro-based industry of our country, textiles industry being the largest. Production of
molasses has increased from 0.4 million tonnes in 1950-51 to 8.29 million tonnes in 1995-
96. The Government has already decontrolled the prices and movement of molasses.
(Source: Appraisal Report of SBI dated September 5, 2008)
A. MOLASSES
Molasses, which is the by-product of sugar industry, is one of the major raw materials for
manufacture of alcohol. The Company is situated in the neighbourhood of fertile sugar belt
where availability of molasses is plenty.
The requirement of raw materials for the Company was/is as follows:
Molasses usage
Grain usage
& requirement
& requirement
Year 2004-05 2.00 lakh quintals 2.12 lakh quintals
Year 2005-06 1.86 lakh quintals 3.05 lakh quintals
Year 2006-07 3.35 lakh quintals 3.48 lakh quintals
Year 2007-08 3.19 lakh quintals 3.36 lakh quintals
Year 2008-09 1.70 lakh quintals 4.60 lakh quintals
The Molasses are procured directly from the neighbouring Sugar mills, and also through
dealers at competitive prices.
The Molasses’ market is expected to remain, more or less, stagnant during the year, with
full availability of the same. No shortage in supply is envisaged. The Company expects the
prices to be at its lowest during the months when the stocks of molasses is usually high
(when the Sugar mills are high in capacity of molasses and are in the process of disposing
off the same on account of lack of storage capacity).
The major suppliers of Molasses during the year ended March 31, 2009 are as under:
Sl. NAME
Purchase % of
No.
(Rs. In Total
lakhs) Purchase
of
Molasses
1 Sonepat Cooperative Sugar Mills Ltd., Sonepat, 184.47 29.35
Haryana
2 Choudhury Devilal Cooperative Sugar Mills Ltd., 150.17 23.90
Gohana
3 Meham Co op Sugar Mills Ltd., Meham 139.67 22.23
4 The Haryana Cooperative Sugar Mills Ltd., Rohtak, 84.53 13.45
Haryana
5 The Shahbad Cooperative Sugar Mills Ltd., Shahbad 59.97 9.54
Haryana
6 Om Shiv Sheera Supply, M Nagar 7.73 1.23
7 Goyal Trading, M. Nagar 1.89 0.30
B. GRAIN
The Company’s facilities produce Alcohol from both molasses and grain. Grain primarily
comprises broken rice, ground wheat flour (atta), jowar, bajra etc. As regards Grain, the
Company procures its Grain requirement from Delhi’s wholesale Grain market.
Grain is procured through dealers/stockists in Delhi. The Company expects no shortage and
full availability of grain throughout the coming years. The price-trend of the grain is also
expected to remain stagnant throughout the year, and no volatility is expected.
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