Balrampur Chini's ₹2,850-cr eco-friendly plastic gamble

The company is setting up its first facility to manufacture biodegradable plastic from sugar

- Nehal Chaliawala

With India's sugar sector increasingly constrained by government price controls and climate volatility, Balrampur Chini Mills is making a ₹2,850-crore wager on a new growth engine: bioplastics.

The country's second-largest sugar producer is setting up its first plant to manufacture polylactic acid, or PLA, a biodegradable plastic derived from sugar.

The facility, expected to be operational by early 2027, will be built next to its existing mill in Kumbhi, Uttar Pradesh, and consume roughly 10% of the company's sugar output, according to Stefan Barot, president of Balrampur's chemicals division.

The plant will have a production capacity of 80,000 tonnes per annum, Barot said in an interview in Mumbai.

Balrampur is targeting ₹2,000 crore in annual revenue from the new unit, with Ebitda (earnings before interest, taxes, depreciation, and amortization) margins of 35% at full capacity.

Analysts at Elara Capital expect a more gradual ramp-up: 60% capacity utilization by the second half of fiscal 2027, rising to 75% by FY28.

The models forecast ₹180 crore in Ebitda during the second half of FY27 and ₹520 crore for the full year FY28.

While the PLA unit is still under construction, the firm has begun importing the material to test market appetite and onboard clients.

Barot said he was in Mumbai to meet with prospective customers.