India’s Shree Renuka Sugars is interested in acquiring more Brazilian sugarcane mills to add to the local assets it took over earlier this year.
The leading Indian refiner bought two local sugar and ethanol companies in 2010, marking its entry into the world’s largest sugar producer.
“Were looking at expanding (our current assets) and, of course, we’re open to more acquisitions,” Shree Renuka’s president, Narendra Murkumbi, said on the sidelines of a two-day Datagro seminar on sugar and ethanol in Sao Paulo.
He added that the company is not presently in talks with any prospective targets.
In the current Oct-Sept 2010/11 season, Shree Renuka’s four local mills will process 11 million tonnes of cane and are expected to expand crushing in the next season, although Murkumbi said it was too early to predict an exact volume for next season.
Imports of raw sugar to feed the group’s refinery in India are expected to reach 1.2 million tonnes this season, up from 900,000 tonnes in the previous year. All of it should be sourced in Brazil.
Murkumbi also said his joint-venture with state-run oil refiner Hindustan Petroleum Corp would invest $80 million to build a sugar and ethanol unit in India.
The appreciation of the Brazilian currency against the U.S. dollar was “a problem for exporters” but it was not a surprise, Murkumbi said, as it was a product of the country’s economic growth.
“The strongest (sugar) companies will be able to deal with it,” he said.
He sees the white sugar premium over raws, currently at around $90 per tonne, rising in 2011 as it is now “creating problems for maximizing refining capacity.”
The premium is far below the peak of $170 per tonne seen earlier this year, but above the $20-$30 range registered a few years ago.