Ugar Sugar Works is fundamentally a farmer-partnered processor that turns sugarcane into a cascade of products - sugar, ethanol, and electricity - in a single, waste-free loop. Founded in 1939 in rural Karnataka with a modest 500-tonnes-per-day crushing capacity, it has spent eight decades expanding that core idea into an integrated manufacturing complex where the by-product of one process becomes the fuel or feedstock for the next. The recurring approach is a closed-loop model: crush cane for sugar, ferment the leftover molasses and juice into ethanol, and burn the fibrous bagasse to generate power, so almost nothing leaves the system without creating value. # Business segments Four engines fed by a single raw material - a sugar foundation that supplies the feedstock for a large ethanol business, a small state-controlled liquor operation, and a power plant that runs on crop waste. ## 1. Sugar: the agricultural anchor that feeds everything else **Two mills crush cane from over 80 local villages, producing sugar for factories and kitchens while generating the molasses and bagasse that power the company's other engines.** - **Farmer relationships are the real supply chain** - sugarcane makes up roughly 90% of total input, and the company sources it from a command area of about 76,000 acres across more than 80 villages, with field staff visiting growers to support cultivation and boost yields. The promoters have wide acceptance among local farmers, which helps secure cane even in competitive procurement seasons. - **Seasonal crush, year-round sales** - cane is harvested and crushed from October to April, but sugar is sold throughout the year to institutional buyers like beverage makers, bakeries, and dairy processors, as well as through agents for household consumption. The company also exports through merchant traders against government-issued quotas, shipping over 120,000 quintals in FY25. - **Policy sets the price floor** - the government fixes the Fair and Remunerative Price that mills must pay farmers for cane, which means the company's largest input cost is outside its control, while sugar selling prices are monitored daily to time sales for maximum realisation. ## 2. Industrial Alcohol: the ethanol engine built for government-mandated fuel blending **An 845-kilolitre-per-day distillery - most of it added in the last three years - turns cane juice, molasses, and grain into ethanol sold almost entirely to state oil companies for mixing into petrol.** - **Multi-feedstock flexibility keeps it running year-round** - during the sugar season, the 800 KLPD direct-route plant runs on cane juice or syrup; in the off-season, it switches to B and C heavy molasses or grain, with a 400 KLPD grain-based configuration that used maize in FY25 to capture better margins when maize prices were low. - **A single, reliable customer** - ethanol is sold to oil marketing companies under the government's Ethanol Blending Programme, and payments arrive within 20 days of sale, giving this business a faster cash cycle than sugar. The distillery division contributed 47% of total revenue in FY25, overtaking sugar as the largest revenue stream. - **More capacity in the pipeline** - environmental clearance has already been obtained for a 110 KLPD distillery at the Jewargi site, signalling that the company intends to replicate its ethanol expansion at the second mill location. ## 3. Co-Generation: electricity from crop waste **Bagasse - the dry fibre left after crushing cane - is burned in high-pressure boilers to generate 59.5 megawatts of power, most of it sold to the grid.** - **Fuel that arrives with the cane** - the same crushing process that produces sugar also delivers bagasse and discarded wash, which are used as free fuel to generate electricity, so the power business carries no separate raw-material procurement cost. - **Two generating units** - the Ugarkhurd plant houses a 44 MW turbine, while the Jewargi unit contributes another 15.5 MW, for a combined installed capacity of 59.5 MW. - **Sold into the open market** - after a long-term purchase agreement with the state electricity companies ended in January 2023, power is now sold through the Power Trading Corporation on the open exchange, though the Karnataka government has at times directed the company to supply power exclusively to the state grid under emergency orders. ## 4. Potable Alcohol: a small state-controlled liquor sideline **A 45-kilolitre-per-day molasses distillery produces spirit and Indian-made liquor sold entirely through Karnataka's state beverage corporation.** - **A single-channel buyer** - all potable alcohol is sold to the Karnataka State Beverages Corporation Ltd, which controls liquor distribution in the state, making this a low-complexity but tightly regulated business. - **The original distillery before ethanol took over** - the 45 KLPD molasses-based unit at Ugarkhurd, now dwarfed by the fuel-ethanol plant, is the one used for spirit and IMFL production. An earlier attempt to build a branded premium-liquor business through a subsidiary, USW Spirits Private Limited, was wound down and the subsidiary was in the process of being struck off by FY23. # Group structure and partners **The company operates on a standalone basis with no active subsidiaries, after absorbing its only wholly owned subsidiary and winding down a liquor joint venture.** - A wholly owned subsidiary, Ugar Theatres Private Limited - originally incorporated in 1977 to run cinema halls - was merged into the company in October 2023 through a scheme of amalgamation approved by the NCLT, with the theatre premises long since repurposed as a warehouse. - **The subsidiary USW Spirits Private Limited, formed in February 2021 with the Shirgaokar Group and Baumgartner India to market premium liquor brands, was in the process of being struck off by FY23.** - The company holds an investment in preference shares of Synergy Green Industries Ltd and carries a CARE BBB- (Stable) credit rating as of FY24. - In February 2026, two members of the promoter group were reclassified as public shareholders, reducing the promoter holding from 46.75% to 43.99%.