Kovur Co-Operative Sugar Factory Ltd, Nellore

INDUSTRY PROFILE Sugarcane belongs to the genus SACCHARAM. The word Sugar is as derived from the Sanskrit word SHARAKARA fro which the word SACCHARAM seems to have been derived indicates the antiquity of knowledge of sugarcane in India. Sugar Industry is the second largest agro based industry in India next to textiles, producing an all time record of 400 lakes tones of direct plantation sugar as on 30th April 2005. It has emerged as the largest vacuum pan sugar producer in the world. Sugarcane is grown in about 102 countries in the world and India occupies the first rank from the point of area-followed by Brazil and Cuba. Andhra Pradesh occupies the fifth place with regard to cane area and cane production in the country. There are around 493 sugar mills across the country with an aggregate installed capacity of 16.2 million tones. These are sitting on a mountain of inventory - 10 months consumption as closing stocks, to be precise. A combination of factors emanating primarily from unfavorable policies -some are there for long and some are there for long and some others have come in recently -- has ensured that the industry has lost the confidence of all the major stakeholders such as investors, banks, financial institutions and farmers. This has led the industry from one crisis to another.The resultant rush by mills, especially from the North and the West, to scuttle the sugar release mechanism by moving the courts has sent not only prices but the industry as well hurtling down-hill. The present cost structure is such that the mills could never be profitable exporters.Not surprisingly, they are caught in a pincer-like situation - caught between mounting stocks and unviable operations. The most questions are: how many will survive by the time they see light at the end of the tunnel. A peep into the regulatory regime for the industry will put its predicament in