EID Parry shuts Parry Sugars’ Kakinada refinery due to unviability

The Board of Directors of EID Parry and their wholly-owned subsidiary Parry Sugars Refinery India Private Limited (PSRIPL) at their respective meetings held on Tuesday approved the closure of operations of the refinery unit of PSRIPL with effect from the close of March 31, 2026.

The company said in an exchange filing that PSRIPL had established a sugar refinery at Vakalapudi Village, East Godavari, Kakinada, in 2006 as a 2,000 TPD SEZ-based export-oriented unit. The original business model was built on importing raw sugar, refining it into white sugar, and exporting the refined sugar to global markets where white sugar commanded a significant premium. At the time of conceptualisation, the global white premium levels were quite attractive, making the project commercially viable. The project economics were also premised on the assured availability of natural gas at Kakinada and generation of surplus power to the Power Grid at a tariff which made the proposal commercially attractive.

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“However, over the years, several structural shifts materially eroded the fundamentals on which the business model was built. Non-availability of natural gas resulted in investments in coal boiler thereby increasing the operating costs…In addition, there were shutdowns due to factory accidents, substantial demurrage charges, inventory write-off, hedge losses and high finance cost, which cumulatively have resulted in significant increase in accumulated losses,” the company added.

PSRIPL has accumulated losses as of March 31, 2025 of around ₹1,406 crore, the company reported, adding that the current geo-political outlook is very challenging. The refinery is, therefore, assessed to be no longer structurally viable, it added.

As of March 31, 2026, the total estimated liabilities of PSRIPL amount to ₹998 crore, which includes bank borrowings of ₹877 crore backed by support from the company. Based on the estimated realisation of assets, net of other liabilities, PSRIPL expects to be able to settle ₹137 crore of these bank borrowings.

After estimated realisation of assets, the company estimates that around ₹740 crore of its remaining liabilities will need to be settled through funds infused by EID Parry in the form of equity and loans.

For this purposes, the EID Parry Board also approved investment in the shares of PSRIPL up to an amount not exceeding ₹610 crore in one or more tranches. It also approved an inter-corporate loan of up to ₹130 crore to PSRIPL.

Published on April 1, 2026