Shree Renuka Sugars ups stake in KBK to 80 percent

Mumbai’s Shree Renuka Sugars (BOM:532670) announced plans today to increase its equity stake in Pune-based KBK Chem-Engineering (KBK) to 80.28 percent from 54 percent for an undisclosed amount.

KBK is an engineering company and subsidiary of Shree Renuka Sugars providing turnkey solutions to distilleries, ethanol and biofuel plants. As part of its infrastructure with Shree Renuka Sugars, KBK owns or leases five sugar plants throughout India.

Sugar mills are one of India's best potential sources of renewable energy, according to a study from New Delhi-based NGO Centre for Science and Environment. The study shows sugar mills and windmills both produce about 2 gigawatts of energy, but sugar mills do it at half the cost (see Sweet new source of renewable energy in India).

Shares of Shree Renuka Sugars declined 5.69 percent, closing at Rs 132.65 ($2.78). The company’s 52-week high is Rs 152.40, with a 52-week low of Rs 41.30.

Shree Renuka Sugars, which went public in 2005, is an integrated manufacturer focused on sugar, biofuels and allied products in renewable energy and power. The company’s products include sugar, power, ethanol and biofertilizers. It’s the largest sugar and ethanol producer in coastal India, with primary operations in the states of Maharashtra and Karnataka. In February 2008, Shree Renuka Sugars set up Shree Renuka Energy to further invest in the power cogeneration business.

In 2008, Shree Renuka Sugars and Mumbai’s Hindustan Petroleum announced a deal to set up an integrated sugar plant with associated facilities for the production of ethanol in the state of Maharashtra. Financial terms of the agreement were not disclosed. The integrated facility’s capacity was expected to be 240 kiloliters per day, with a co-generation power capacity of 30 megawatts (see HPCL, Shree Renuka to build ethanol plant).

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