Only one in five factories in North Andhra is making profits

Published: 27th August 2012 12:59 PM  |   Last Updated: 27th August 2012 12:59 PM   |  A+A-


The ailing cooperative sugar factories in the state are on the verge of closure. And those in the north coastal Andhra districts are no different.

 Of the five cooperative sugar factories in the region which have been suffering losses over the years, the Chodavaram factory is the only silver lining registering profits this year after a long time.

 The cultivation of sugar cane, which is the second largest crop after paddy in the north coastal districts, is drastically coming down.

 As against normal area of 1.1 lakh hectares, the cultivation of sugar cane crop has come down by about 30 percent in the last three years.

 Officials say farmers are unable to continue cultivation of sugar cane as there is no remunerative price from private sugar factories, while the cooperative sugar factories are yet to clear long pending dues to many farmers.

 Due to heavy losses accumulated over the years, none of the five cooperative sugar factories is taking up crushing at full capacity.

 A sugar factory should operate for at least 130 days in a season, but none of the five cooperative sugar factories is able to run for more than 100 days in a year as the farmers are not supplying cane to the factories, the managing director of a factory told Express on condition of anonymity.

 While only the Chodavaram factory registered meagre profits this year, the other four at Etikoppaka, Anakapalle, Tandava and Bhimasingi are in huge losses amounting to crores of rupees.

 Unlike earlier, the factories are unable to provide financial help to farmers for cultivation due to losses.

 As a result, farmers are forced to avail the financial assistance given by jaggery merchants and middlemen, and sell their produce for price less than the minimum support price due to a preagreement.

 The downfall of cooperative sugar factories is being attributed to negligence of the factories in updating technology and machinery.

 Further, no review meeting on accumulated losses was conducted in the last six years and thus, these factories are unable to request the state government to provide necessary financial help.

 The government also did not revise the asset value of these factories over the last two decades despite their having huge properties.

 And thus, no bank is ready to provide loans or any sort of financial help to these factories.

 “If the government takes initiative to sort out any of these issues, the factories will be able to get financial assistance from either the government or banks.

 It will help the factories procure modern equipment and recruit skilled personne,” a senior assistant general manager said.

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