Detailed SWOT Analysis of Balrampur Chini Mills – One Of The Largest Sugar Manufacturing Company In India

Quick Stats on Balrampur Chini Mills

Founder	Shri Kamal Nayan Saraogi
Year Founded	1975
Origin	Kolkata, West Bengal
No. of Employees	5,500+
Company Type	Public
Market Cap	$76.95 Billion (2022)
Annual Revenue	$48.11 Billion (2021)
Net Income/ Profit	$4.6 Billion (2021)

 

Products by Balrampur Chini Mills  

Balrampur Chini Mills has been in the sugar sector for over decades-long and it deals in various products;

• Sugar
• Ethanol & Alcohol
• Power
• Bagasse
• Agri-Inputs

Competitors of Balrampur Sugar Mills

Staying in the sugar sector for a long and competing globally is bound to create some competition. The best 5 competitors are.

• Bajaj Hindustan Sugar
• Avadh Sugar & Energy Ltd.
• Triveni Sugar ltd.
• Shree Renuka Sugars
• EID Parry

Now that we understand the company’s core business, let’s delve into the SWOT Analysis of Balrampur Chini Mills.

SWOT Analysis of Balrampur Chini Mills 

A SWOT analysis evaluates the strengths, weaknesses, opportunities, and threats that a firm faces. Balrampur Chini Mills may evaluate its business and performance against rivals and the industry as a whole using this tried-and-true management model.

It’s a great tool for figuring out where the firm shines, where it falters, devising countermeasures, and figuring out how to expand.

To better understand the SWOT analysis of Balrampur Chini Mills, refer to the infographic below:

So let us start by expanding on the strengths of Balrampur Chini Mills:

Strengths of Balrampur Chini Mills 

The distinctive qualities that provide a company with an edge in acquiring greater market share, attracting a larger audience, and maximising profitability are essentially its strengths. The following are Balrampur Chini Mills ’ strengths:

• Sustainability: They use Bagasse – the residue material left after the crushing of sugarcane to produce green energy and fuel instead of fossil fuels. They even use it to make organic fuels and electricity. Sustainability just means using the waste of one product as a raw material for another product.
• Increase in Share Book Value: Share a market is a place that sees daily constant changes in every company’s share prices; due to these changes in the market trends in the last few months Balram Chini Mills experienced an increase in their share book value. Balram Chini Mills sugar stocks are on roll including Balrampur, Triveni, Dhampur, and Dwarikesh hit new highs.
• Brand Name & Reputation: Balram Chini Mills has been running successfully since 1975 which helped them to gain goodwill and reputation over other brands; from running for so long they know how the market works which helped them in growing bigger day by day. The Company’s 24 facilities are spread across ten locations and have an aggregate cane crushing capacity of 76,500 tonnes per day.
• Product Portfolio: Balrampur Chini Mills’ portfolio consists of rich manufacturing of downstream products like power (co-generation) and ethanol. The product line includes sugar, ethanol & alcohol, power, bagasse and ahri-inputs. The vast portfolio of products helps Balrampur Chini Mills to explore more revenue streams.
• Low Debt Ratio: Looking at their financials Balrampur Chini Mills has a low debt ratio which helps them in investing more and more in marketing prospects and other activities.
• Social Responsibility: Balrampur Chini Mills are involved in a bunch of social activities sustainably and equitably in the enrichment of the community by creating sustainable livelihood, education, healthcare, sanitation, and development of rural infrastructure.
• Customer Trust: From being the oldest and leading company in this industry helped Balrampur Chini Mills to have more customer loyalty and trust and also because of their sustainable approach.
• Government Support: Balrampur Chini Mills gets immense support and recognition through various awards from the government of India which is why the limited company is still generating revenues in increasing directions. 

Weaknesses of Balrampur Chini Mills 

Weaknesses are negative aspects and attributes which have little control over. These are the areas where the business needs to improve to remain competitive.

• Degrowth in Revenue and Profit: With the increase in share value and the entry of more competition and lifestyle changes the Balrampur Chini Mills are experiencing a drastic decrease in revenue which eventually leads to a decrease in overall growth and profit. 
• More Competition: The entry of new competitors inside the market who are more technologically advanced and the growth in sugar-free products can lead to a significant decline in the market and other sugar substitutes like jaggery, honey, etc. 
• Missing International Presence: The constant lack of a strong global presence in the international market has now become a weakness for the company.
• Low Yield of Sugarcane: As the main raw material here is sugarcane sometimes due to climate changes and other factors there is a low yield of sugarcane which then affects sugar production.
• Transport Delay in Sugarcane Reaching: Sugarcane has to compete with other food and cash crops like oilseeds, cotton, rice, etc. affecting the supply of sugarcane to the mills and the production of sugar.

Opportunities for Balrampur Chini Mills 

Opportunities refer to the chances of the progress of the company in future. Let’s have a look at the opportunities for Balrampur Chini Mills:

• High Recovery Rate: A recent study revealed that even though the shares of Balrampur Chini Mills go through constant fluctuating prices in their share price, their recovery rate is still very good.
• Switching to Organic Fuels: Their usage of organic fuel instead of fossil fuel creates an opportunity on their behalf and lets them use their raw materials more sustainably.
• Digital Growth: Due to the market growing more on the digital aspect; they should try to grow their product more digitally like selling the Agri inputs and sugar on e-commerce sites and even better on their website and encourage more farmer growth.

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• Production of Value-added Products: Even though they are a wide-scale company they still face substantial economic loss. To reduce this loss they can try making value-added products like lactic acid from bagasse.
• 100% Utility/ Recycle Model: Balrampur Chini Mills has opted to utilise/ recycle 100% effluents by adopting composting technology to manufacture bio-compost and by maintaining zero liquid discharge.

Threats to Balrampur Chini Mills

These are the factors that have the potential to harm an organisation. Threats are uncontrollable external factors that might overcome or damage the strength and opportunities.

• The Decline in Financials: According to a recent study, we found a strong decline in the overall financials of the company with their revenue declining very constantly and subsequently which is an alarming call for Balrampur Chini Mills.
• Increase in Non-core Income: The usage of profit in non-core incomes rather than core incomes can be a big threat to the company in near future.
• Technological Advancement: The constant increase in technology nowadays can also be considered a threat if the company doesn’t make use of these technological advancements for its benefit.
• Niche Markets: Only staying in the local and niche market can lead to a decline in growth and if not solved can become a big threat to the company, as the competitors are increasing rapidly day by day.
• Competition in Khandsari & Gur Production: Khandsari and Gur have been manufactured in the rural sector log before the advent of sugar in the organised sector and since the Khandsari industry is free of excise duty it can offer higher prices of cane to the cane growers, a study showed almost 60 per cent of the cane grown in India is used for making Khandsari and Gur and which results in a shortage of cane to the mills.

This ends our comprehensive SWOT analysis of Balrampur Chini Mills. Let us conclude our learning below.