Page 38 - BCML AR 2019-20

Deepening our DNA

‘Is this just a pipe dream?
When will this transpire?’

To all the people who ask me this, my liquated its allocated export quota,
answer is that the DNA of much of this moderated its sugar inventory and
already exists within our Company. enhanced cash flows, validating its focus
on efficient manufacture and not ‘playing’
At BCML, we have stuck to our knitting the market. The result is that even as the
(manufacturing sugar and byproducts); country may moderate its sugar inventory
we grew our manufacturing footprint and to around five and half months of
capacity without loading excessive debt consumption, BCML could end the sugar
on our books; we allocated our business season 2019-20 with a closing stock of
surplus into growing our manufacturing just two months of sales.
At BCML, we breadth or shrinking our Balance Sheet At BCML, we believe that sustainability
through buybacks; we walked away from
believe that we more business projects and proposals in a commodity business is derived by
owe much to the than we embraced. achieving more with given resources. In
society where This caution was validated when the line with this conviction, the Company
we work. When government of India announced the is exploring additional models -
COVID-19 export quota for 2019-20. Even as contemplating the diversion of syrup
spread, we the Company could have waited in to manufacture ethanol, which could
moderate sugar output but enhance
decided to expectation of higher realisations, it ethanol production.
manufacture
hand sanitisers
and distribute Reviewing our 2019-20 performance
them free
of cost to BCML reported a creditable performance sugar recovery in 2019-20 of 11.93%
communities in 2019-20. (after factoring in the sugar loss due
around our It is expected that India’s estimated 2019- to production of B-heavy molasses),
compared to 11.58% in 2018-19. Around
manufacturing 20 sugar production would be 27 million 38.3% of cane was diverted to produce
units tonnes, down by more than 20% from B-heavy molasses for the production
2018-19 and the lowest in three years.
The decline was largely due to lower cane of ethanol. The sugar output sacrificed
planting following a drought in 2018 and on account of a diversion to B-Heavy
floods in 2019, especially in Maharashtra molasses was ~0.51 lac tonnes during the
and Karnataka. year. BCML correspondingly reported a
10.63% increase in revenues to C4741.29
Interestingly, mills in Uttar Pradesh crore while EBIDTA stood at C681.97 crore
produced around 12.6 million tonnes and Total Comprehensive Income stood
of sugar. The larger decline would be at C502.27 crore. The Company generated
in Maharashtra, where production is C603.69 crore in cash profit in 2019-20.
estimated at about 6.2 million tonnes, The Company produced 11.67 lac tonnes
against 10.72 million tonnes in 2018-19.
of sugar during the year, which was 8.67%
During the year under review, BCML lower than the previous year, primarily
crushed 102.03 lac tonnes of cane, owing to the diversion of cane to B-Heavy
compared to 110.36 lac tonnes in molasses. Average sugar sale realisation
2018-19. The Company achieved a (including export sales realisations) was

36 | Balrampur Chini Mills Limited