EID Parry sees scope in biofuel & food biz: CEO

Chennai: Murugappa Group-owned sugar manufacturer EID Parry is looking to grow revenue from branded FMCG and biofuel segments as climate vagaries and regulatory uncertainty plague the sugar sector, Muthu Murugappan, CEO and whole-time director, EID Parry told TOI in an interaction. “We are getting more agile to work around sectoral pressures, and in coming years, capital allocation will go into biofuels and consumer segments, to grow non-sugar revenue significantly,” the fifth-generation scion of the Murugappa Group said.“It was a challenging quarter [for sugar business]. Poor monsoons were the root cause; rainfall was deficient and disparate in both Maharashtra and Karnataka. This not only impacted volumes but also recovery,” Murugappan said. On a standalone basis, EID Parry clocked a quarterly loss of Rs 14 crore as against profit of Rs 16 crore in the same quarter last year. Distillery segment came under pressure as the government in December 2023 ordered restrictions on the usage of sugarcane juice/syrup for production of ethanol. EID Parry’s nutraceuticals segment is said to be under strategic review by the management.“The country’s biofuel program is an opportunity for us, and sustainable aviation fuel is another area that is under research,” he said, speaking about the biofuel business. “The lion’s share of our R&D spends are focused on sugar, and it can be better on the biofuel side,” he admitted.EID Parry has two new distilleries going live in the coming quarters- one in Tamil Nadu and the other in Karnataka. With these, the total distillery capacity will reach 600 KLPD compared to it hovering around 200 KLPD three-four years ago.The company has also laid the foundation for its FMCG business retailing value-added products such as jaggery, brown sugar, low-glycaemic index sugars, and other sweeteners. It also sees scope for growth in branded staples and now sells rice, dal, millets in Tamil Nadu under the Parry brand. The group will increase new product development work in the food business in coming years, Murugappan said.“The idea is to leverage the equity of the brand and take more space in the consumer’s food basket. We have started distribution of staples in TN and will move into other states in coming quarters,” Murugappan said, noting an interest in value-added products such as millet and roti mixes as well.EID Parry has also tapped new-age technologies to ensure long-term competitiveness. While use of drones to spray pesticides is a mature practice at the firm, more recently it is engaging with startups on a pilot basis to use Artificial Intelligence (AI) for scientific and accurate irrigation methodologies instead of flooding fields with water. The company also has a multi-lingual app for use by their network of 5,000+ farmers for crop health monitoring, yield forecasting, and other purposes, and is also reinventing this app, Murugappan said.“India has a large population to feed, and we are hopeful that one day, regulations will support corporate participation in farming, in whatever way or form, to deliver better farm outcomes,” the executive said.
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