Empee lines up Rs.15-bn investment for new projects, expansion

By Venkatachari Jagannathan, Chennai, Oct 8: The city-based Rs.10-billion Empee group, with business interests in liquor, sugar, hotels and real estate, is on an expansion overdrive on an outlay of Rs.15 billion.

To be funded through a mix of internal accruals and debt, the new projects are expected to treble the group size once these go on stream, senior company officials said.

Group liquor company Empee Distilleries is planning to set up two beer plants in Andhra Pradesh and Tamil Nadu with or without a foreign partner, while sugar manufacturer Empee Sugars and Chemicals is putting up a greenfield integrated sugar complex in Tamil Nadu.

In the hospitality sector, the group's strategy includes promoting its own brand: setting up new hotels, as well as renovating, expanding and upgrading existing hotels to have around 600 rooms across different star categories under its fold.

These apart, Empee group also plans to build residential apartments and a star hotel on a 40-acre land bank it acquired in the Sriperumbudur belt several decades ago.

"The two breweries would cost around Rs.1.8 billion. We are looking out for a good brewer as a partner, and have put on hold earlier plans of a blending and bottling unit in Andhra," Nisha Purushothaman, joint managing director, told IANS.

The Tamil Nadu plant will have a capacity of producing 750,000 cases per month, while the plant in Andhra Pradesh will yield 500,000 cases.

According to her, the company has got the letter of intent from the Andhra government and the site selection process has started.

A major player in the southern market with brands like Old Secret rum (sales 200,000 cases per month) and Napoleon brandy (100,000 cases per month), the company would like to take some of its brands national, Purushothaman said.

The Rs.5.57-billion Empee Distilleries is also planning to set up a 10MW biogas power project in Kerala and looking at opportunities in the windmill sector there.

Meanwhile, the Rs.596-million turnover Empee Sugar will start construction work on a greenfield integrated sugar complex on an investment of Rs.5.15 billion in Tirunelveli district in Tamil Nadu this month.

"We will also expand the capacity of our existing mill at Nellore by 500 tcd to 3,500 tcd at an outlay of Rs.300 million. The expanded capacity will be ready this year," joint managing director K. Jayachandran told IANS.

One tcd refers to tonnes (of sugarcane) crushed per day.

After the expansion, the company's sugar capacity will go up to 8,500 tcd (Nellore plus the new project), distillery 130,000 liters per day (lpd) with Nellore accounting for 30,000 lpd, and power generation 70 MW (20 MW at Nellore).

In hospitality, the Empee group will develop a 362-room hotel, Hilton Chennai, on an investment of Rs.4 billion; another 100-room three-star hotel in Sriperumbudur near Chennai; and renovate and expand two hotels - the business class Grand Orient Hotel from the existing 63 rooms to 100 room and to four-star category, and the 50-room New Victoria Hotel, both in Chennai.