Case Study On Shree Renuka Sugars Limited

1. Prepared By:
Biman Boruah(15-50-
106)
Dibakar Dutta(15-50-
107)

2. Breaking the mould in a traditional industry by
Shree Renuka Sugars Limited.
Department Of Management Studies , NIT Silchar

3. SWOT Analysis of Indian Sugar Industry
Strength
 Indian Sugar Industry is the 2nd largest producer in the world after Brazil.
 Indian Sugar Industry paid well over Rs 122.69 billon to the sugar cane growers.
 Provides direct employment including ancillary activities to near about 0.6 million workers.
 Sugar cane is more profitable than any other cash crop in India.
 Radius between the sugar industries is decreased from 40km to 15km.
 High demand through out the year.
Weakness
 Non excess availability of raw material.
 Lack of Professionalism.
 Old Technology.
Department Of Management Studies , NIT Silchar

4. Opportunities
 High value of by product of downstream industries.
 Technology upgradation.
Threat
 Govt regulate the price
 Ground water availability for irrigation .
 Quality of soil deteriorates due to over use of fertilizer & presticides .
 Production of sugarcane dependent on sugar cane.
Department Of Management Studies , NIT Silchar

5. Strategies in achieving organic growth
 Buying of second hand equipment.
 Co-generation of power.
 Port based cogeneration refinery
 Surplus electricity generated is sold to Indian grids.
 Taking plant on lease for production.
Department Of Management Studies , NIT Silchar

6. Key learning from SRSL
 How to reduce capital investment in acquiring fix asset?
 Backward integration for effective production.
 Mutually working with other firms for optimal utilization of resources
available in the industry.
Department Of Management Studies , NIT Silchar

7. Role of leadership in case of SRSL
 Changing the trend from cooperative to private sector.
 Providing shares to farmers.
 Increasing processing capacity greater than the average in the industry.
 Acquisition of other firms in the industry.
Department Of Management Studies , NIT Silchar

8. Why SRSL expanded to Brazil ?
 Brazil is the largest producer of sugar cane in the world.
 As the cost of production in Brazil is much lower as
compared to other countries.
 Climatic condition of Brazil is favorable for Sugar
Industries.
 Seasonal variation of production.
Global expansion strategy
 SRSL established themselves at an international standard by acquiring Brazilian Crusher Equipav for
Rs. 1156 crores.
Department Of Management Studies , NIT Silchar

9. CORPORATE RISK EXPOSED to SRSL
 Selling shares to Wilmar International which can lead to acquisition in future.
 Bought 50.34 % shares of Brazilian Crusher Equipav which was in heavy debt .
How they overcome the risk?
 SRSL invested 5.62 Billion to increase the crushing and co-generation capacity.
 To repay debt and increase Working Capital from the deal amount.
Department Of Management Studies , NIT Silchar

10. Global Business Entry Option
European Union is one of the highest producer of
sugarcane and second most consumer of sugar.
Unites States is one of the highest consumer of sugar
and Mexico is the fourth largest producer of sugar.
Department Of Management Studies , NIT Silchar

11. Department Of Management Studies , NIT Silchar