PERFORMANCE OF SUGAR INDUSTRY IN KARNATAKA -AN ECONOMIC ANALYSIS
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Date
1999-08-30
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UNIVERSITY OF AGRICULTURAL SCIENCES GKVK BANGALORE
Abstract
Sugar industry is an important agro-based industry in India. There
were 408 sugar factories in the country during 1994-95, producing 146.43 lakh
tonnes of sugar. Considering its importance in the development of rural-led
economy, the present study analysed the performance of the sugar industry in
Karnataka. The data were collected from eight sugar factories over a period of
time. The analysis of data included compound growth rate analysis, ratio
analysis, principal component analysis, computation of cost of processing,
break-even level of sugar production and capacity utilization and SWOP(T)
analysis. The results of the study revealed that, due to economies of large
scale production, the above average sugar factories were better than their
counterparts with respect to crushing activity and financial performance. All
the sugar factories had a recovery percentage, above 10 per cent, which is
satisfactory. The current ratio was greater than unity in all the sugar
factories except in the c^e of Kampli sugar factory. Due to high exit rate of
the stock and its management, the turnover ratios were found to be better in
above average sugar factories. The profitability ratios were found to be
negative in cooperative sugar factories. However, the cooperative sugar
factories had better networth than public and private sector sugar factories
due to creation of huge assets with less borrowings. The installed capacity
was under-utilised in all the sugar feictories during 1995-96, except Ugarkhurd
and Davangere sugar factories. The cane cost formed the prime share in the
total cost (71.79%), followed by the other variable costs (16.60%). It was also
found from the study that, to be a viable factory, a below average sugar
factory with a crushing capacity of less than 2100 TCD has to produce 333,900
quintals of sugar and an above average sugar factory (5000 TCD) has to
produce 1078,330 quintals of sugar. The results of principal component analysis
revealed that, equity, owned funds, borrowings, liabilities, inventories, assets,
total sales, sugar sales, total income, total purchases and total expenses highly
influenced the performance of sugar factories.
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