Aman Sonthalia (from Kolkata) made one of the most appreciated, sharp and impactful presentations at 2023 VP Annual Conference on the Sugar Industry.
Aman_Sonthalia_Sugar_2023_VPConf.pdf (5.2 MB)
In his own words:
Hello Everyone! Greetings.
I, Aman Kumar Sonthalia, am a value investor. Born in 1969 in a typical middle-class family, I was very keen on seeking knowledge since childhood. My father used to apply to IPOs, and that was the first time I learned about the stock market. My keen sense of seeking knowledge led me to read N number of business newspapers and magazines, and that’s how I started investing in markets with the help of Expert opinions. I have invested in multiple industries, including sugar, textiles and Infra.
From being a naïve investor to an entirely fundamentally in-depth Value investor, my entire Life has been a roller coaster ride with varying 52 weeks of high-lows. I mean, this is how life should be. From meeting management of different industries to doing ground-level research about the entire company, my current belief to mint money is an acronym denoted by KCP Ltd (a la Anil Goel), which represents Knowledge, Conviction, Patience, Luck and Timely Decision, which are all interrelated and required if you want to make good money.
With this, I am here to share a few insights about the sugar industry, and I hope you all will find it helpful.
We hope VP Community, and the larger Investment Community in India will continue to benefit tremendously from Aman’s generosity. Our gratitude to Aman for sharing his knowledge and wisdom so freely.
More information on the steam saving technology mentioned in the presentation:
The technology is designed to optimize the use of steam in various processes within a sugar plant, including evaporation, crystallization, and drying. The system uses high-pressure nozzles to atomize the steam, which increases its surface area and improves its efficiency. The system also includes advanced control and monitoring features to ensure that steam is used only when necessary and at the optimal pressure and temperature.
The System can help sugar plants reduce their steam consumption by up to 20%, resulting in significant energy savings and reduced operating costs. Below is there client list as per the website:
- Bajaj Hindusthan Sugar Ltd.
- Balrampur Chini Mills Ltd.
- Dhampur Sugar Mills Ltd.
- EID Parry (India) Ltd.
- Shree Renuka Sugars Ltd.
- Triveni Engineering and Industries Ltd.
- Uttam Sugar Mills Ltd.
- Dwarikesh Sugar Industries Ltd.
- Dalmia Bharat Sugar and Industries Ltd.
- Rana Sugars Ltd.
How does saving steam optimise the performance of sugar mills?
Increased efficiency: Steam is used extensively in sugar plants for various processes such as heating, evaporation, and drying. By optimizing the use of steam, sugar plants can operate more efficiently, reducing energy consumption and operating costs.
Higher quality sugar: Saving steam can improve the quality of the sugar produced. The correct use of steam can reduce the moisture content in the sugar, resulting in a higher quality product that meets customer expectations.
Reduced downtime: Steam is also used for cleaning and maintenance of the sugar plant equipment. By saving steam, the plant can operate for longer periods without the need for cleaning or maintenance, reducing downtime and improving overall productivity.
Environmentally friendly: Saving steam can also have environmental benefits. By reducing energy consumption, the plant can reduce its carbon footprint and contribute to a more sustainable operation.
There is one Aman Kumar Sonthalia who holds more than 1% stake in Ponni Sugars. Is this thr same Aman? Great presentation on Sugar industry…thanks a ton!
From the Website of Uttam Sugar - They have ten folded their production in the last ten years with 2,000 TCD in 2001 to 20,000 TCD in 2011. However only the name of board of directors are mentioned without any background or qualification.
Do not see any mention of ETHANOL or other products apart from sugar
This was an excellent session by Aman ji. I have never been able to understand the sugar sector, always felt that there are too many factors and it’s too cyclical. I have mostly got stuck at the wrong time. However Aman ji explained the whole thing and turnaround in a very simple and logical manner. Thanks.
I have been trying to find details around expansion in Uttam Sugar but couldn’t find the same in last annual report or recent credit rating reports. Can someone please share details/relevant resources. Thanks
ok. somehow i was under impression that the expansion is much higher. They had the following capacity till 2022:
So it’s not a very big increase (vs what I was thinking). I think most of the sugar cos have been expanding the ethanol capacity inline with what Uttam is doing.
There is more capacity expansion that is scheduled to be completed by Dec 2023 The distillery capacity of ethanol will go up from 150 KLPD (kilo litre per day) to 250 KLPD at the Barkartpur plant.
After E20 target , Ethanol blending with Diesel ED7. 7% blending with Diesel. Ashok Leyland lab trial with HPCL has shown improvement in pollution level. IOCL also tied up with diesel engine manufacturers for trail with 5% blending with Diesel .
Grain based ethanol production faces challenge. Supply of broken or damaged grain by FCI for ethanol production has been curbed. In 2021, the ethanol production capacity in India from
molasses-based distilleries was 426 crore litres while that from grain-based distilleries stood at 258
crore litres. Govt will set ethanol price for this year in next couple of month and will be effective from Nov-2023.