Al Khaleej may get nod for setting up sugar refinery in India (08-07-2009)
Al Khaleej may get nod for setting up sugar refinery in India
Dubai-based world's largest sugar refinery Al Khaleej's proposal to set up a wholly-owned sugar refining capacity in India will be considered by the foreign investment promotion board (FIPB) next week, after being stuck in the policy logjam for more than a year, according to a report in The Economic Times.
The proposal stands brighter chance of being cleared this time, as the government has modified the sugar policy allowing import and export of sugar on tonne-to-tonne basis, instead of grain-to-grain. Al Khaleej's proposal was rejected last year by FIPB, as the government then did not allow trading of sugar on tonne-to-tonne basis, a major component of the Dubai company's proposal. In its proposal to the government, Al Khaleej had insisted on replacing the grain-to-grain stipulation by tonne-to-tonne. Located in Dubai, Al Khaleej Sugar's standalone refinery is the largest in the world with a capacity of 4,800 tonnes per day. Since the region does not produce sugarcane, the company sources raw sugar from various parts of the world and refines it. Sugar from the refinery is exported to nearly 40 countries.
The company plans to expand its capacity by importing raw sugar into India and process it at the proposed Indian subsidiary. The tonne-to-tonne basis of allowing duty free import of raw sugar means that advance licences would be given for importing raw sugar on zero duty on the condition that the same amount of any category of sugar would be exported within a stipulated time, while grain-to-grain means that the same category of sugar would be exported within a stipulated time.
Last year, the board turned down Al Khaleej's proposal saying that the firm could not be allowed to bring foreign investment, as the commerce and food ministries were not in favour of the proposal.
