Balrampur Chini Mills Ltd
NSE:BALRAMCHIN
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Balrampur Chini Mills Ltd
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Ladies and gentlemen, good day, and welcome to Balrampur Chini Mills Limited Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Ms. Jenny Rose from CDR India. Thank you, and over to you.
Good afternoon, everyone, and thank you for joining us on Balrampur Chini Mills Q4 and FY '23 Results Conference Call. We have with us today Mr. Vivek Saraogi, Chairman and Managing Director; Ms. Avantika Saraogi, Business Lead; and Mr. Pramod Patwari, Chief Financial Officer of the company. We will initiate the call with opening remarks from the management, following which we will have the forum open for a question-and-answer session. Before we begin, I would like to point out that some statements made in today's call may be forward-looking in nature, and a disclaimer to this effect has been included in the results presentation shared with you earlier.
I would now like to invite Mr. Saraogi to make his opening remarks. Over to you, Mr. Saraogi.
Yes. Thank you, and good afternoon, everyone, and thank you for joining us on the Q4 FY '23 call of our earnings. I trust all of you had the opportunity to go through the results presentation providing details of our operational and financial performance. I would initiate the call with an update on the current developments in the sugar sector, followed by our company's key highlights for the period under review.
ISMA has lowered its projections for overall production during the '22 to '23 season from 34 million tonnes to 32.8 million tonnes. This factors in about a 4 million tonnes diversion from sugar to ethanol. The crushing season in Maharashtra concluded with a production of about 10.5 million tonnes. This was against 12.1 million tonnes, which was projected earlier, primarily due to lower yields. In contrast, UP production could be 10.5 million tonnes to 10.6 million tonnes. Karnataka is estimated at 5.7 million tonnes as compared to 6.2 million tonnes. So in a nutshell, UP has gone up about 5% -- [ 10 point ] about 3% to 4% UP has gone up and the rest have come down.
Furthermore, sugar mills have almost completed the export quota of 6 million tonnes, and I believe it's been shipped out from not only the mills, but also majorly out of the port -- Pramod, how much could have left the ports?
Maybe [ 5 million tonnes ]
From the port. Yes. So it's basically evacuated. And given the drop in production, the government is focused on ensuring adequate domestic supply. Obviously, based on the production, consumption and export numbers, we will have a closing stock about 6 million tonnes. And hence, there is no probability of any further export. This also means that there is a very fine balance of demand and supply, which is positive for the pricing. It should keep pricing in farmstead.
On the ethanol front, India is making progress in blending ethanol with petrol and the target of -- towards the target of achieving 20% blending. Ethanol supply to OMCs has resumed to INR 434 crores in 2021. To meet the 20% target, the government is promoting production of ethanol from maize crops as well, but that seems to be a little far off. The target is to reach 12% blending in '22-'23, which is a current season, 15% in '23-'24 and going up to 20% thereafter. This would require a capacity of 20% would require a capacity of 1,700 crore litres.
The auto industry is adapting with fuel flexible vehicles [indiscernible] 20 ethanol pumps have been launched in more than 100 outlets. Also, the auto companies have started -- from 1st April, all the vehicles should be able to take E20. So they've also sort of been able to reengineer or enable the engines to adopt E20 from 1st April. Ethanol production has also benefited sugar industry and farmers.
On the business front, company concluded the year on a positive note on account of steady contribution from Sugar and Distillery segment. Despite a moderate performance in the 9 preceding months due to lower crushing volume in the previous year's, the company witnessed an improvement in Q4 '23, primarily owing to enhanced ethanol capacity utilization across segments -- capacity utilization. During the quarter, cane crushing was higher due to increased cane area and improved yield at the farm level.
So if I can brief, we have crushed 10.3 crore quintals of cane against 8.88 crore quintals, and that is an increase of about 15% over last year. Our recovery approximately is almost final. Last year was 11.46% -- 11.47% on a blended level of CAV. And this year, we would be about 11.62%. So that is an improvement of about 15 bps with increase in percentage of 15%. So both have gone up. And this, as you are aware, the last 2 years were ruining because of excess rain in very short periods of time.
Coming to Distillery business, capacities are now being optimally used. We are confident in our ability to reach the target of 34 crore to 35 crore litres of ethanol production. Additionally, the company has embarked on a project to increase cane crushing at its Kumbhi unit from 8,000 to 10,000 TCD which will be financed through internal accruals and which would be commissioned prior to cane crushing in the next year. The company has allocated more than INR 1,100 crores towards CapEx in FY '23, out of which INR 466 crores have been raised through debt financing, while remaining funds have been sourced through internal accruals. These strategic investments will enable us to drive growth in future.
In conclusion, the company is dedicated to generating value for all the stakeholders through prudent investment and capital allocation strategies. Keeping this in mind an interim dividend of INR 2.5 per share was paid during the year. Additionally, we commenced our 6th consecutive buyback of equity shares on 16th November, and we have bought back a total of 22.9 lakh shares. The buyback is open till 15 May, but the -- it's beyond the permitted price. This brings me to the end of my discussion.
I would request Avantika to provide you an update on the progress on the cane front.
Good afternoon, and thank you, everyone, for joining the call. I'd like to give you a short overview of the cane activities. Our implantation is almost complete for the year. The total area under cane has again increased by an additional 7% to 9% for the upcoming year. This shows a further heightened cane availability in the season to come. Area of disease [indiscernible] generating fuel 0 to 3 is reducing drastically every year. We stood at around 75% crush just 2 years ago. And in the year gone by, we have already come down to 46% crush. And by the next year, we will drop to only a 27% crush.
Of 238?
Of 0238, yes. No, no, total. This will not only improve the recovery to the tune of its reduction, but also the incidence of disease will reduce due to the fastness of it, and it will also make it easier to identify and salvage the disease sort thereafter. The area of 0238 which has been reduced, has been taken over by a higher recovery varieties like CO 0118, which we had only around 4%, 5% of 2 years ago. And this year, we have crushed approximately 20% of it. And it will increase by a further 13% for the upcoming year, putting us at a total of 33% for the upcoming year. This variety has proven its superior recovery and good yields in the factories, which have crushed a higher percentage of it this year. Other than this new and higher recovery varieties, which we have -- which we crushed a negligible amount of this year have also increased to the tune of 8% crush for next year.
Therefore, in a nutshell, we are again set up for an even higher crush and an even higher recovery in the upcoming season. Other than this, we have faced a lot of climatic disruption, and we have worked very, very hard on mitigating any sort of climate risk, be it high temperature, drought, flood, heavy winds, et cetera. We have worked and we'll continue to work on climate smart agriculture to shield ourselves from any drastic changes, which can occur for cane quantity and quality year-on-year. And other services really picked up is raccoon management, credit to our cane staff, but now our farmers have really adopted this idea of working on raccoon crops, which was never a practice in East UP.This will also help total crush and recovery. We have also done cane payments at a consistent 8 to 10 days post supply basis. which is even before it becomes due at a 14-day according to the government norm. This has created immense goodwill at the farmer level, and it helped us motivate them to plant good varieties and do all necessary agri practices in order to keep the crop flush and healthy. Lastly, programs like tissue culture and seed nursery are on and going well. This will ensure long-term healthy cane supply. That's it for the cane front.
Yes. So basically, that was a rundown on the cane front and now I'd request Pramod for some remarks and then we can go to Q&A.
Thank you, and good afternoon, everyone. I hope all of you had the opportunity to go through the presentation that has been shared wherein all the financials and quantitative data have been given. To ensure that we have a larger portion of time for Q&A session, I would request the moderator to open the call. Thank you.
[Operator Instructions] We have a first question from the line of Rajesh Majumdar from B&K Securities.
And congratulations on a good number. I had a question on the ethanol supply program of the government. If we look at it that we are talking about 600 crore liters this ethanol year '22, '23, of which you said about 518 crores tenders have already been finalized. Now why is the offtake so far till 23rd April only 220 crore liters have been delivered? I wanted to answer to that.
And secondly, even if you look at our own ethanol sales for the quarter, it is about 2 crores short of the production, which has never happened before. So is there any worry on that, that our ethanol sales though, we are targeting INR 34 crores, INR 35 crores may actually be far shorter because of the lower crop this year? That was my first question.
So oil marketing companies came off with 600 crores of ethanol requirement for the '22, '23 ethanol year. Subsequently, there was a revision in the cycle. They reduced the period from 12 months to 11 months. So on that basis, on 12% blending, the consumption requirement would be around 500 crores liter.
For 11 months.
For 11 months. And they are trying to build up a storage for around 50 crores to 60 crores liter. So against 550 crore liters to 560 crore liters, I believe 518 crore liters has already been contracted. This is the position as of now.
As far as Balrampur Chini Mills is concerned, so there was some delay in start as well as stabilization of distilleries. So that as a result of which, the production was on the lower side. But if you see the inventory number of ethanol -- alcohol as of 31st March, we are holding 2.27 crores liter against last year's number of around 60 lakh liters. So some dispatches had happened in the last week of March. And as you must be knowing that the ethanol revenues are accounted for only on delivered goods basis. So there was in transit, ethanol was in transit, around 50 lakh liters.
So you are saying effective stock is 1.5 crores liters.
In addition to that, there was low.
So just to add to what Pramod said, so oil marketing companies need a steady stream of supply for the year. So some stocking will happen at our end, marginally higher than last year. So that in the weak months of July, August, September, when most people don't produce, we will produce. There will be adequate availability of ethanol there in the last quarter, where people usually fail.
Okay, sir. And out of this 513 crores, is it possible to know our market share in the tender?
Our -- sorry, our share?
Our tender quantity. Our tendered quantity in that 513 crores, yes.
So our tender quantity is 26.74 crores liter.
And this we hope to complete by ethanol year '22, '23?
Correct.
Yes, before November.
Before November.
We have our next question from the line of Shailesh Kanani from Centrum Broking.
I had a couple of questions. First, on margin front, so Vivek has always been guiding that margins on juice routes are similar to what we have in B-heavy molasses. But somehow this quarter around, there has been a sharp drop [indiscernible] and I believe that...
Mr. Kanani, I'm sorry, your sounding muffled.
You are breaking. Yes.
Is it better?
Yes.
So my question was with respect to margins on the distillery front. Sir, you have been guiding that juice route has similar margins as [indiscernible]
I'm sorry, sir. We are not able to hear you.
You are not audible.
We have a next question from the line of Pratik Tholiya from Systematix.
So just a quick clarification. In fourth quarter, we sold [ 4.32 ] crore liters of ethanol from syrup and grains route. Can you split this between how much is syrup and how much is grain or it was 100% syrup?
100% syrup.
100% syrup. Okay. And sir, have we exported any sugar in fourth quarter? Or we have sold our entire -- the quota to Maharashtra?
I think he's talking about export quota.
Yes, yes, sugar exports.
Yes. Out of 1.98 lakh tonnes of quota located to us, 1.4 lakh tonnes was met through digital exports and the balance was swapped against domestic use.
Right. So sir, there's no physical sale in fourth quarter, right? Physical export in fourth quarter for us?
There is physical sale of export in the fourth quarter. So between 31st of March, we have completed the entire 1.4 lakh tonnes.
Okay. Understood. And the quantity that you've had against the swapping of quota, that has not yet been allocated or that will come from May onwards?
No, that has already been allocated. It started from November itself. It will run from November to maybe I don't recall the exact month, maybe May, June, July.
Okay. Because your sales actually the -- if I see Y-o-Y, your domestic quota has been largely flat.
Yes, you are right. Particularly in the month of March, the demand as well as the prices were subdued.
Sorry, I missed the last part, demand was?
Subdued.
Okay. Okay. And sir, just lastly, a broader question because we are expanding our crushing capacity also from 8,000 TCD to 10,000 TCD of one of the plants. And there are other industry players also who seem to be expanding capacity. But I mean, just on a maybe 3-year horizon, how do you see the availability of raw material? Of course, madam just pointed out that you are doing a lot of work in terms of increasing the yields and all but with overall industry also expanding and then there are also those weather-related challenges we've always been facing whether it is weak monsoon or excess monsoon or drought, et cetera. Do you think the raw material availability with this expanded capacity, not just for us, for the industry as a whole, will it be steady sales supply or there could be challenges going forward in terms of availability of cane, maybe 3, 4 years down the line?
So we don't see a challenge in cane availability. To the tune of the capacity that we create, we will always, in my mind, this cane came without a issue.
So let me bifurcate your concerns into 3 parts. One, you're talking of other expanding. So cane availability in our geographic area is pretty to be expansion done in our area. So nobody in our area is expanding, first. Two, you spoke of El Nino, so East UP, especially and I'm just sticking my neck a bit on this one, but don't hold me to it. Little lower rainfall is beneficial for us. And if there is -- if the latter part of the year doesn't have rainfall, we'll be delighted, which September onwards, we don't get rain. So El Nino doesn't concern us so much. Expansion I've answered, our crushing capacity increase, which you just pointed out and as Avantika has said, we'll have enough cane.
So we -- to hazard a guess for the next year, we hope to be 10% higher in terms of cane crushing. The recovery can't be predicted, but we are looking to be definitely higher on recovery also based on Avantika's presentation of variety of change and disease management.
We have our next question from the line of Sanjay Manyal from ICICIdirect.
I have a few questions. One is what I understand your domestic quota was somewhere around 8.26 lakh tonnes for the full year, whereas your total sales is 9.03 lakh tonnes, which includes 1.4 lakh tonnes of exports. So have you foregone some domestic quota in the financial year or maybe in this quarter?
Yes, yes. As I was mentioning earlier, the prices were subdued. Domestic prices were subdued in the March quarter. So there was lower sales.
So this would be to the tune of 50,000, 60,000 tonnes or?
The exact data, we don't have, but Pramod is giving you the answer that absolutely depressed prices, we decided to forgo a bit of sale, which will come back later.
Okay. Okay. Understood. And if you can just repeat what is the -- what is the CO 0238 percentage in the crushing this year and expected next year? I missed that.
46% was crushed in the year gone by, and we expect only 27% in the next year.
And Avantika, the 27%, which we're looking to crush will be much better and healthier.
Healthy. Because the disease spread less due to the fastness of the yield.
Okay. So next year, 27% would be CO 0238 and 33% would be 118. So which would be the other varieties which you are using?
So we are looking at some very high yielding varieties like 15023 and 14 -- there are some varieties which are sort of only meant for low land. So it's a combination of that.
Around 8% of higher yielding varieties, in totality you can say.
Super higher [indiscernible].
Yes. I'm not wanting to bifurcate among [indiscernible]
We have our next question from the line of Kaustubh Pawaskar from Sharekhan by BNP Paribas.
Sir, my question is regarding the sugar production for the next year. Then considering the higher yield varieties and good recovery rate, what kind of expectations are in terms of production for upcoming season and season after that?
So are you talking for Balrampur or for the country?
For Balrampur.
As we indicated too, next year, we are definitely looking at 10% higher, weather not playing truant, super truant and maybe another 7% to 8% thereafter. Our capacity, just to give everyone a flavor of our business protocol division between B-heavy, juice, sugar crushing. Our assets on the ground today are sufficient and would need about INR 12 crores for 100% sweating. And we hope to get that -- let's say, you get 1030 this year, you're looking at 10% more, so 1130, 1140 next year and thereafter, easily 12%.
Okay. Okay. And sir, my second question is on the working capital. So this year, obviously, because of the higher inventory, the working capital requirement from -- on a higher yield. But in one of your slides in the presentation, as the distillery contribution goes up, the working capital requirement will also moderate, so in that context, should we expect the working capital days to come down over the next 2 to 3 years?
Yes, you are absolutely right. The reason behind working capital utilization went up this time because of the deployment of internal approvals into the CapEx. Had there been no CapEx, you could have seen the working capital utilization lower by INR 500 crores at least. As we move up. there will be lower working capital utilization.
And sir, one last one on the international plant. In April, the Brazil production has crossed around 22-odd percent, which is what I've read in the [indiscernible] So should we expect the international supply to go up considering the fact that the dilution towards the ethanol is a little bit on a lower side because of the drop in the crude prices. So in that context, should we expect supply to be a little bit higher on the international front? And did it have any impact on sugar prices or sugar realization process?
My request would be don't go by this every fortnight release of data. Brazil's production already expected is around 37 million tonnes to 38 million tonnes for the upcoming sugar season. That has already been factored in the prevailing international prices as well as the overall demand supply or sugar availability at the global level.
Basically, to see Indian prices, the more relevant data is India's inventory. India's upcoming production with an understanding that export as and when permitted should sell at a healthy price. All 3 of these boxes are ticking and ringing very loudly today. So as Pramod said, we don't need to look at any other data in case you're looking to track Indian sugar prices.
We have a next question from the line of Shailesh Kanani from Centrum Broking.
Sir, my question was with respect to margins from juice route vis-a-vis B-heavy molasses. We have been guiding that the margins would be on the similar trend between juice route and B-heavy. And some of this quarter, the margins have taken a fall because of juice route sales basically. So can we share some views on that and also guidance going ahead for the distillery division?
We would not like to share the segment wise guidance as far as the profitability is concerned. But the profitability or the margin out of juice is definitely lower than the B-heavy. This is what we have seen in whatever period we have distilled.
But as we go ahead, this margin will improve a bit because we have first year with B-heavy. We tried various chemicals combinations. Towards the end, we got the result, and we hope the margins ratio will definitely improve.
Okay. But the fall in margin seems to be very steep. That is the reason I was wondering the juice margins are very less? Or if you...
These capacities are yet to be fully utilized. So that is also one of the reason.
[indiscernible] plant stabilization.
There were some issues with respect to stabilization also.
It takes some time for the brand new things. So you -- your concern or don't worry [Foreign Language] You will see next year that they will be like touching each other, close to each other.
Okay. So my related question because of that was that, correct me if I'm wrong. So we are not in a catch 22 situation wherein we are facing margin pressure under juice route vis-a-vis B-heavy and if we don't take juice route, our volumes would not give a healthy jump as we are expecting. So that is not the situation, right?
That's not the situation.
Okay. So this quarter can be taken as an...
Having said that, Shailesh, having said that, at the current juice-based ethanol prices. Margin is lower than B-heavy.
But you've got to understand that all 3 things need to be done in order for the country to holistically move forward. We definitely will improve from this year. But as Pramod said, you cannot expect the same margin maybe.
So I'll just give you another scenario. In 4 years from now, let's say, sugar production becomes excess, and the global markets take a downfall, you will find that these 2 divisions are giving you the best return. So you are hedging yourself into all 3 based on a government program, which needs the industry participation in order to fructify. Yes, as Pramod said, it will be lower, but it will definitely make up from here. Some of the gap will narrow as we have seen in the last one month or worthy.
So sir, sorry to stress on this, but can you give a guidance on a consolidated basis in that case, if we are not comfortable with the...
Shailesh, we don't give guidance of the margin or for tariff.
Fair enough. Sir, I missed one part of the call. Can you share the sugar volume and realization breakup between domestic and export for the quarter?
I think that has already been shared in the presentation.
Okay. I'll just go through it then. Sir, one more question. We have seen a timing difference in ethanol offtake for the fourth quarter. So in light of that, do we revise our 34 crores liters, 35 crores liters of guidance for ethanol volume for the next year?
As of now, we look to supply 34 crores liters to 35 crores liters for FY '24. But as the season progresses, we will update you.
But there is no big sort of gap on you're looking at.
Okay. So if I can squeeze in one last question. Sir, I'm seeing some stock of syrup as well mentioned in the presentation. And I was under the impression that syrup can't be stored. So if you can just share some light on that?
It's a work-in-progress.
It's rotation. So distillery, when you begin, you get feed in 5 days. So it's that which is rotating within the machines.
And one more thing, this year, we began a little late because some of our expansions sort of got completed 15 days later into supply. And there was a lot of water in 2, 3 factories. So next year, hopefully, with this hanging of production, we should be able to begin an average of 10 days earlier for the whole company. So that itself will increase your ethanol supply.
We have a next question from the line of Nishant Sharma from Nuvama Wealth Research.
Sir, my question is, again, related to margins. Just wanted to understand, while distillery segment is the highest grossing margin, this time around, we have seen one-off kind of events which impacted the margins. But in terms of sugar sales in domestic and in international markets, where we would generally get better margins? Or maybe if you can help us understand where international prices need to be certain percentage higher to be equal in domestic -- getting margin same in domestic as well as international markets?
We need to evaluate the performance of the company of a sugar company on a company level basis, #1 and on an annual basis. March quarter will always be the best quarter because of the fact that we get complete 92 days of production and fixed over -- fixed overheads get allocated or spread over a larger volume production. This segment by profitability is a function of transfer pricing. If I want to assign a lower value for that in molasses, my profitability will jump up in the distillery division.
Understood, sir for distillery and sugar segment, I got it. I was asking for a spread between international target -- efficient sugar in international market? And if we sell sugar in domestic market. So what is the -- I mean, price differential that would be needed for having a similar margins? So that is what I just wanted to understand sales.
This is irrelevant at this point in time. We are selling sugar at around INR 36.5 per kg in the domestic market as against the international prices of say around INR 51 per kg. But nobody in the country has any quota to export sugar. And that is the reason that these prices are running so high in the international market.
Okay. I'll just switch to the other questions. So my next question is, sir, we have mentioned some levy of duty in the distillery segment on molasses, what is that levy of about INR 7 crores -- usually INR 7 crores. Is it one-off or it's regular one?
It's the regular one.
UP keeps imposing new fees, which one has no control over. We also want to cut again this but with no success.
Okay. But no, such things happen every year? Or this is more like changes in the rate happens every year?
No, not every year, but this...
It was introduced last year.
This was...
This is as a percentage of something we can build in our -- going forward we can build in, because possibly this -- this might have also impacted our margins?
I know it has impacted, but we agitated very hard. We don't hope that such nonsense should repeat itself, but withdrawal of this...
Okay. Last question I can squeeze in. On the distillery side, Is there any significance for using whether we use B-heavy molasses or sugar syrup or grain based like in quarter 1, quarter 2, seasonality is there, or sir?
Sorry, I didn't get your question.
So basically, in terms of manufacturing or producing ethanol, we use different raw material or the input side. So we use B-heavy molasses, we use sugar syrups and now we have capacity for gain based as well. So we will be seeing any cyclicity while using this input? Or this can be done at any given point of time? It could be interchangeable any cost of?
So there is only one distillery, which is compatible for making grain. That's the Maizapur one. In season, it will run on syrup full. Off season, it will run on grain. The rest, we have some -- the rest are all B-heavy ones. One is C-heavy for country liquor. But yes, they are interchangeable in terms of B can run on C. Juice can run on B. But nobody can run on grain outside of Maizapur.
We have a next question from the line of Rajesh Majumdar from B&K Securities.
I had a question on the CapEx on the sugar mills. What is the kind of output increase envisage or do we envisage at all from the modernization that we have done at the sugar mills level? I'm just talking about the sugar CapEx, not the distillery CapEx.
So what we are going to get is higher cane availability and lesser losses and old plant, safety, breakdowns, et cetera. So if you -- just as I explained to you, East and West are 2 different zones. West UP harbors have no problem if you run up to middle of May, they don't reduce cane. If you do that in East UP, they will reduce cane. So we've got into a higher capacity. Now this will enable us to crush what we need to go to 12 crores by April end. So that will keep the recovery good, losses less, durability of supply on a longer basis.
So it will have an impact on the recovery, whatever little bit it has?
Definitely, positive recovery impact by not getting into the May month and lower losses.
I was just wondering basically because the CapEx is pretty significant. So what kind of a like kind of return we want to see on that kind of investment we made in this company? On the sugar side at least.
Yes. Let me explain to you the rationale behind these big investments. So these are old plants and they need it to the million tandems, et cetera, needed to be changed for durability and for higher efficiency and safety. With that, we added juice into Balrampur. So it's a well-thought-out measure. Obviously, such investments don't yield return in 1 year. But I'm very certain over the next 2 to 3 years, we should have our investment in the bank, 3 years from now.
3 years [indiscernible] for the sugar?
Beyond now. So total 4 years.
Okay. Okay. That's helpful. And sir, one question I had, like, we have seen an impact on the sugar crop this year due to Maharashtra. If we see a continued impact this year, El Nino, whatever, if it happens, is there a chance of the ethanol program getting derailed a little bit in terms of the government procurement reducing in which case, we will not be able to meet our targets?
I didn't hear your question.
So the question is we had already seen a sugar production fall this year. If we see in sugar year '23, '24 also some kind of El Nino impact on the crop from wherever. Will we see a derailment of the blending program on the government reducing it?
Let's get the sequence very clear. If you produce below 280, you have a problem. Okay. Then when you -- your ethanol diversion and your production is net of the diversion, no. So this year, even a bad year, you produced almost 330 lakh quintals. Your gross was 370. So next year, your gross is even 300, they are encouraging it. And the exports will not be allowed to that extent. Domestic production, net of exports and -- sorry, domestic production, net of ethanol should be equal to what is required for consumption. The program never gets derailed and I don't think that's even in the horizon anywhere.
So the government will use export tool more as kind of balancing factors is what you're saying?
So can I explain to you if you hear me properly, please? Production is net of ethanol. What this figure, you see 330 lakh tonnes is net of ethanol, no?
Correct.
So obviously, the production is recorded net of ethanol, so net of ethanol production has to be above 28, 280 lakh tonnes. Correct?
Yes.
So that is your sugar availability to feed the country. If that is over and above 280, and your closing stock is 6 million, export will be allowed.
Ladies and gentlemen, that was the last question for today. I now hand the conference over to management for closing comments. Over to you, sir.
Thank you very much. I hope we have been able to answer all your questions satisfactorily. Should you need any further clarification or would like to know more about us, please feel free to contact us. I once again, thank you for taking the time to join us on this call.
On behalf of Balrampur Chini Mills, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.
Thank you.