We’re a non-public firm in physique, however cooperative in soul,” declares Bhairavnath Bhagwanrao Thombare, carrying a yellow hardhat and standing exterior the ethanol distillery connected to his sugar mill in Maharashtra’s Dharashiv district.
Thombare, 71, is the Chairman & Managing Director of Pure Sugar & Allied Industries Ltd, an Rs-800-crore-turnover firm that runs Maharashtra’s first ever sugarcane mill to be arrange within the non-public sector after greater than 4 many years.
It began on September 7, 1998 — only a week after the sugar trade was de-licenced — when Thombare obtained an IEM (industrial entrepreneur memorandum) to ascertain a mill at Ranjani village in Kalamb taluka of then Osmanabad district. That mill, which may crush 1,250 tonnes of cane per day (tcd), was commissioned on February 29, 2000.
As we speak, apart from this manufacturing facility that may crush 5,000 tcd, Thombare’s firm owns one other 2,500-tcd mill at Gunj-Sawana in Mahagaon taluka of Maharashtra’s Yavatmal district. Within the final 2023-24 season, the 2 mills collectively crushed 14.94 lakh tonnes (lt) of cane procured from some 22,000 farmers.
Thombare is a part of a key shift in Maharashtra’s sugar panorama — from a state the place virtually solely cooperative mills have been allowed to function to at least one that’s considerably managed by non-public barons, a lot of them larger than Thombare. In 2023-24, 104 out of Maharashtra’s 207 operational mills have been non-public. They crushed 46.5 per cent of the state’s cane and produced over 44 per cent of its sugar. That’s a far cry from 25 years in the past — in 1998-99, there have been merely three non-public factories which collectively produced simply 2.3% of Maharashtra’s whole sugar.
With Maharashtra heading to the polls, which manner the important thing gamers of the politically influential sugar trade — each cooperative and personal — align is being keenly watched
It began with Vajpayee
Historically, sugar in Maharashtra has been synonymous with cooperative mills.
Not shocking, given the preferential therapy the mills bought from successive Congress governments, beginning with Yashwantrao Balwantrao Chavan’s, which made positive no new non-public sugar manufacturing facility was began after 1958. Chavan, and likewise Vasantdada Patil after him, noticed sugar as a software for empowerment of the bigger rural inhabitants and their very own upwardly cell Maratha farming group. Not granting any new non-public mill licences was an efficient technique to consolidate the group’s management of the Congress occasion in Maharashtra.
Between 1951-52 and 1998-99, the variety of non-public mills within the state shrank from 14 to 3 — Ravalgaon Sugar Farm (Nashik), New Phaltan Sugar Works (Satara) and Saswad Mali Sugar Manufacturing unit (Solapur) — whereas that of cooperatives soared from 1 to 116.
As they grew in numbers, so did their political and social affect. With every mill procuring sugarcane from 10,000 or extra farmers, it gave the chairman and administrators of the cooperatives huge powers to wield patronage that might lengthen to the political area. Usually, the founder-chairman of a cooperative sugar mill would go on to imagine larger mantles like that of the native Member of Legislative Meeting or Parliament. They’d, then, cross on the legacy to their sons and even grandsons. Maharashtra has had a protracted line of chief ministers — from Vasantdada Patil (who managed the Farmers Cooperative Sugar Manufacturing unit in Sangli) to Vilasrao Deshmukh (Manjara in Latur) — who rose by the sahakari (cooperative) route.
However all that’s historical past as cooperative mills have made manner for personal sugar magnates. The credit score for this goes to 2 males.
The primary was Atal Bihari Vajpayee, whose authorities on the Centre, on August 31, 1998, de-licenced the sugar trade. Henceforth, anyone may freely arrange a sugar mill, offered it was at a minimal 15-km radial distance from an current or proposed new manufacturing facility.
The second particular person was Thombare, who confirmed the best way to different non-public entrepreneurs. Thombare is satirically somebody who lower his tooth in cooperatives. Between 1978 and 1983, he labored as chief accounts officer on the Ambajogai (Beed), Godavari Manar (Nanded) and Jai Jawan Jai Kisan (Latur) cooperative sugar factories. From there, he grew to become the managing director of two cooperative mills — Manjara (Latur), promoted by former Congress chief minister, the late Vilasrao Deshmukh; and Vaidyanath (Beed), promoted by senior Bharatiya Janata Occasion (BJP) chief Gopinath Munde.
As Manjara’s prime government throughout 1984-1997, Thombare oversaw the organising of the manufacturing facility and its operations from the 1986-87 sugar season (October-September). Munde’s Vaidyanath mill got here up in a report 11 months and, in 1998-99, was India’s first to crush 5 lt of cane throughout a trial season.
“I used to be with Vaidyanath until 1999-2000. That was the trial season for my very own manufacturing facility, which took even much less time (9 months) to be prepared. I used to be then shuttling between the 2 places. He (Munde) let me go in early 2000 after I discovered him an ready alternative as managing director,” recollects Thombare.
Thombare’s Rs 18-crore mission was financed by a consortium of city cooperative banks that lent Rs 9 crore on the “private assure” of Munde. The remaining 50 per cent fairness funding got here from the promoters and a few 5,000 farmer-shareholders.
“Even immediately, 40 per cent shares in my firm are held by 12,500 farmers… I’m myself from a farmer household, born and raised until major faculty on this village (Ranjani),” he says.
Over the past 20 years, Thombare has invested closely in a string of initiatives at his mills. The Ranjani mill has a 23-megawatt co-generation plant (which burns bagasse, the fibrous residue after juice is extracted from sugarcane) and a 150 kilo-litres per day distillery, which provided 3.25 crore litres of ethanol to grease advertising corporations in 2023-24, utilizing B-heavy molasses and direct cane juice/syrup.
Thombare has additional invested in bio-digesters for treating the liquid effluent (spent wash) from the distillery to provide about 60,000 cubic meters per day of uncooked biogas. This biogas, containing 60 per cent methane, is purified to over 95 per cent (by eradicating carbon dioxide and hydrogen sulphide) to be used as boiler gasoline, producing one other 1.5 megawatt of inexperienced energy.
One other facility makes use of press-mud (one other byproduct of sugar manufacture), together with napier grass and farm wastes, to provide 12,500 cubic meters/day of uncooked biogas that’s then purified, compressed and saved in cascades. This compressed biogas is bought as ‘BioCNG’ at Rs 80/kg.
“Ours is the primary sugar mill in Maharashtra to provide BioCNG. We promote 3,500-4,000 kg every day by 4 shops at Ranjani, Dharashiv, Latur and Parli (Beed),” says Thombare.
The Ranjani unit additionally has a submerged arc furnace plant to fabricate 10,000 tonnes per yr of ferromanganese and silicomanganese alloys which might be utilized in steelmaking. “We put in it in 2005 to devour our surplus co-gen energy that the Maharashtra state utility wasn’t shopping for. Energy constitutes 60-65 per cent of the manufacturing value of ferroalloys,” he defined.
As Thombare paved the best way for personal mills, others caught up.
The opposite huge gamers
Vilasrao Deshmukh’s Manjara Group – managed by his sons, Amit and Dhiraj, and brother Diliprao — has grown from one to 10 mills that collectively crushed 53.02 lt of cane procured from roughly 1 lakh farmers in 2023-24. 5 of those are cooperatives, all in Latur district, with a complete capability of 23,450 tcd. The remainder — two in Latur and one every in Dharashiv, Parbhani and Nanded — are underneath non-public corporations: TwentyOne Sugars, Jagruti Sugar & Allied Industries and Manjra Sugar Industries Ltd. Their mixed capability is greater at 27,600 tcd.
Equally huge are the non-public sugar empires of the prolonged household of Sharad Pawar.
Baramati Agro, belonging to the Maratha chief’s nephew Rajendra and grandnephew Rohit, has 4 mills – at Shetphalgade (Pune), Kannad (Aurangabad), Chopda (Jalgaon) and Jamkhed (Ahmednagar) — with an combination capability of 29,500 tcd and crushing 34.70 lt of cane in 2023-24.
Even larger are the six mills — Daund (Pune), Jarandeshwar (Satara), Karjat (Ahmednagar), Omerga and Bhum (Dharashiv), and Samsherpur (Nandurbar) — linked to senior Pawar’s estranged nephew, Ajit Pawar, who controls the Nationalist Congress Occasion (NCP) based by his uncle. These mills have a complete capability of 58,000 tcd and crushed 66.96 lt within the final season, making him arguably the largest of the sugar barons.
Each Ajit and Rohit Pawar are contesting this Meeting election — the previous from the household bastion of Baramati and the latter from the Karjat Jamkhed constituency on the rival NCP (Sharad Pawar) faction’s ticket. So are Vilasrao Deshmukh’s sons, Amit and Dhiraj, as Congress candidates from Latur Metropolis and Latur Rural respectively.
How non-public mills flourished
The proliferation of personal mills, together with the brand new ones promoted by politicians (the Pawar household was historically related to Baramati’s Malegaon and Shri Someshwar cooperative factories), has partly to do with authorities coverage.
Up to now, not solely have been licences reserved for cooperatives, they have been additionally allowed to fulfill 70 per cent of mission prices by long-term loans from public monetary establishments, with the Maharashtra authorities offering ensures for his or her compensation. Even for the 30 per cent fairness portion, the state authorities subscribed as much as two-thirds of the share capital, which the cooperatives may progressively redeem at face worth by deducting part of the cane value payable to farmer-members.
That occasion ended with each de-licencing and the federal government ceasing to put money into the fairness or stand assure for the loans of cooperative mills. Those that managed the mills discovered it extra expedient to begin non-public factories on their very own and even purchase sick cooperatives. The Jarandeshwar mill, as an example, was began as a cooperative by the Maratha strongman Vasantdada Patil’s spouse Shalini, earlier than it was bought to an organization allegedly related to Ajit Pawar in 2010.
“When the choice to file IEMs for personal mills was made obtainable, we went for it. It made no distinction. In the end, we’re serving farmers,” claimed Dhiraj Deshmukh of the Manjara Group.
Privatisation, nonetheless, did little to alter the political clout these sugar mills exercised in Maharashtra.
A former Managing Director of the Maharashtra State Cooperative Sugar Factories Federation, who spoke on situation of anonymity, stated, “Take a look at it this fashion — a giant mill would buy cane from 20,000-30,000 farmers. Aside from the mill, the promoter would additionally run a string of different institutions like academic institutes, medical schools and so on. That may be a supply of each patronage and status within the space.”
Thus, whereas the mills might have modified of their construction, the promoters proceed to be politically necessary. Take the case of the state’s Minister of Public Well being and Welfare and Shiv Sena candidate from Paranda (Dharashiv), Tanaji Sawant. His firm, Bhairavnath Sugar Works, runs three mills in Dharashiv and two in Solapur.
Not all non-public mills have been success tales, although. Gopinath Munde’s household floated the privately owned Pannageshwar Sugar Mills at Renapur (Latur) in 1999. That manufacturing facility and the unique Vaidyanath cooperative have nearly turned sick.
The identical destiny has befallen Armstrong Infrastructure Pvt. Ltd, the factories promoted by NCP chief Chhagan Bhujbal’s household at Malegaon in Nashik, and Shrigonda BJP MLA Babanrao Pachpute’s Shri Saikrupa Sugar & Allied Industries in Ahmednagar.
Regardless of these setbacks, as Thombre realised early on, the needle has decisively moved in Maharashtra’s sugar trade — from cooperatives to non-public.
