Abstract

Balrampur Chini Mills (Balrampur), the largest sugar manufacturer in India, is also one of the most efficient producers of sugar in the country. High capacity utilization rates, good recovery of sugar and a well-diversified business model with revenue streams from sugar, alcohol derivatives and power have kept Balrampur afloat even during the sugar industry's lean years. Balrampur has established a good track record in acquiring inefficient sugar mills and turning them around. Balrampur's financial health is reflected in the high rating for its commercial paper from credit rating agencies. Balrampur is capable of mobilizing finances at the most competitive rates. Balrampur also enjoys high cash credit limits. In early 2003, with no underperforming sugar mills suiting the company's requirement, up for sale in UP. Balrampur's managing director, Vivek Saraogi realizes that his company has to make new moves to build on the competitive advantages generated in the past. One such move is an initiative to launch branded sugar, whose prices will be less vulnerable to market fluctuations compared to loose sugar. Will Balrampur be able to make a successful transition from commodities to brands? That is the question which analysts are debating as 2003 gets under way.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

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Keywords

Balrampur Chini Mills, Sugar Production in India, Indian Sugar Industry, Balrampur's Business model, Acquisitions of sugar mills, Vivek Saraogi, Branded sugar and Meenakshi Saraogi's