Jagatjit Industries Ltd, a company with expertise in the liquor industry, has announced plans to invest INR 210 crore to establish a grain-based ethanol manufacturing plant in Punjab. This move is in response to the growing demand for eco-friendly fuel to be blended with petrol, as revealed by a senior official of the company. With a rich history dating back to 1944, Jagatjit Industries has earned a prominent position as one of India’s leading producers of Indian Made Foreign Liquor (IMFL) and country liquor.
The corporation is listed on the Bombay Stock Exchange and possesses manufacturing plants situated in Kapurthala (Punjab) and Behror (Rajasthan).
“We are setting up a greenfield grain-based ethanol manufacturing facility at Hamira, Kapurthala district in Punjab with a capacity of 200 kilo litres per day (200 KLPD). The total project cost is around Rs 210 crore,” Roshini Sanah Jaiswal, Promoter and Chief Restructuring Officer of Jagatjit Industries, told PTI.
She stated that the funding for the upcoming ethanol manufacturing facility, which will occupy 25 acres of land and is scheduled to start operating in June 2024, will come from a combination of bank loans and internal accruals. The company has already obtained environmental clearance and a license from the Ministry of Forest and Environment.
“We will supply ethanol to oil marketing companies (OMCs),” Jaiswal said. Once operational, ethanol will contribute 20 per cent of the company’s total revenues in 2024-25, rising to 25 per cent share in 2025-26.
“The government has made it very attractive for companies to set up ethanol blending plants to achieve 20 per cent blending by 2025,” Jaiswal said, adding that India’s crude oil import bill would come down significantly leading to a huge saving of foreign exchange reserve.
“We expect a revenue escalation from the ethanol plant at close to Rs 400 crore with a significant EBITDA margin from year one. The increased cash flows will get ploughed back into the IMFL business,” Jaiswal said.
“This year we are also aiming to reduce our debt by 50 per cent by liquidating a real estate asset,” she outlined.
Jagatjit Industries produces a complete variety of alcoholic drinks such as whisky, vodka, rum, gin, and brandy, including the renowned Aristrocrat Premium Whiskey among its brands.
In order to establish a broader national presence, Jagatjit Industries has partnered with bottlers throughout India via its franchise. The company is engaged in various industries, including the production of IMFL/country liquor, malted milk food, and malt extract (under a contract for HUL’s Boost), distillery for manufacturing ENA (extra neutral alcohol) for alcoholic beverages, and commercial real estate.
According to the regulatory filing on BSE, the company recorded a consolidated total income of INR 503.92 crore and a net profit of INR 0.48 crore during the 2021-22 fiscal year.
In the initial nine months of the 2022-23 fiscal year, the company witnessed a rise in its consolidated revenue to INR 457.23 crore compared to INR 356.16 crore during the corresponding period of the prior year. In the April-December period of the previous fiscal year, the company recorded a profit of INR 72 lakh, as opposed to a net loss of INR 7.70 crore during the same period the year before.
