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ASSIGNMENT

OF
BUISNESS ENVIORNMENT

TOPIC : PESTLE ANALYSIS OF SUGAR INDUSTRY

SUBMITTED TO SUBMITTED
BY

MR. BHAVDEEP SINGH KOCCHAR AKASH


JAISWAL

AAMIR RAZA

DHARMENDRA

KARTHIK
VERMA
AMIT KUMAR

PESTLE ANALYSIS

PEST Analysis is a simple, useful and widely-used tool that helps you understand
the "big picture" of your Political, Economic, Socio-Cultural and Technological environment. Some
analysts added Legal and rearranged inserting Environmental factors expanded it to PESTEL or PESTLE,
which is popular in the United Kingdom.

SUGAR INDUSTRY

Introduction

Sugars are a major form of carbohydrates and are found probably in all green plants.
They occur in significant amounts in most fruits and vegetables. There are three main simple sugars
sucrose, fructose and glucose. Sucrose is in fact a combination of fructose and glucose and the body
quickly breaks down into these separate substances. All energy stored in food is derived originally from
the sun and it is made by green plant life. The sun's energy acts upon the green chemical "chlorophyll" in
the leaves of plants to produce sugars and starches from the carbon-dioxide in the atmosphere and the
water from the roots by a process known as Photosynthesis. These carbohydrates (starches and sugar) acts
as a plants food and energy supply. The energy need of human body is largely dependent on the
carbohydrates that are derived from plants. A balanced diet can come from a variety of different foods,
calculated to give the desired levels of carbohydrates, proteins, fats, vitamins and minerals. Nutritional
scientists advocate that carbohydrates should provide at least 50% of over energy requirements.

History

The discovery of sugarcane, from which sugar as it is known today, is derived dates back
unknown thousands of years. It is thought to have originated in New Guinea, and was spread along routes
to Southeast Asia and India. The process known for creating sugar, by pressing out the juice and then
boiling it into crystals, was developed in India around 500 BC.

Its cultivation was not introduced into Europe until the middle-ages, when it was brought
to Spain by Arabs. Columbus took the plant, dearly held, to the West Indies, where it began to thrive in a
most favorable climate.
It was not until the eighteenth century that sugarcane cultivation was began in the United
States, where it was planted in the southern climate of New Orleans. The very first refinery was built in
New York City around 1690; the industry was established by the 1830s. Earlier attempts to create a
successful industry in the U.S. did not fare well; from the late 1830s, when the first factory was built.
Until 1872, sugar factories closed down almost as quickly as they had opened. It was 1872 before a
factory, built in California, was finally able to successfully produce sugar in a profitable manner. At the
end of that century, more than thirty factories were in operation in the U.S.

Manufacturing process

Sugar (sucrose) is a carbohydrate that occurs naturally in every fruit and vegetable. It is a
major product of photosynthesis, the process by which plants transform the sun's energy into food. Sugar
occurs in greatest quantities in sugarcane and sugar beets from which it is separated for commercial use.
The natural sugar stored in the cane stalk or beet root is separated from rest of the plant material through a
process known as refining. For sugarcane, the process of refining is carried out in following steps :

• Pressing of sugarcane to extract the juice.

• Boiling the juice until it begins to thicken and sugar begins to crystallize.

• Spinning the crystals in a centrifuge to remove the syrup, producing raw


sugar.

• Shipping the raw sugar to a refinery where it is washed and filtered to


remove remaining non-sugar ingredients and color.

• Crystallizing, drying and packaging the refined sugar.


Beginning of sugar industry in India

Sugar is made from sugarcane, which was arguably discovered thousands of years ago in
New Guinea. From there, the route was traced to India and Southeast Asia. It was India which began
producing sugar following the process of pressing sugarcane to extract juice and boil it to get crystals.

It was in 1950-51 the government of India made serious industrial development plans and
set the targets for production and consumption of sugar. It projected the license and installment capacity
for the sugar industry in its Five Year Plans.

Types of sugar industry in India

The sugar industry can be divided into two sectors including organized and unorganized
sector. Sugar factories belong to the organized sector and those who produce traditional sweeteners fall
into unorganized sector. Gur and khandsari are the traditional forms of sweeteners.

Machinery suppliers for sugar industry in india

Some of the suppliers that offer cutting-edge machines to the companies involved in
sugar industry of India are:

• Sakthi Sugars Ltd


• Sri Sujay Engineering Products
• Sri Vijayalakshmi Industries
• Murthy Industries
• Parveen Perforaters & Allied Industries
• Aeromen Engg Co
• Kamla Foundry & Workshop
• Tinytech Plants
• Baba Vishwakarma Engineering Co. (P) Limited
Pestle analysis of sugar industry

The pestle analysis of sugar industry can be done in following points :

• POLITICAL ANALYSIS :

i. Acts and orders related to sugar industry : The government of India closely monitors
sugarcane and its production as they have a substantial effect on the lives of the people.
The industry is governed by a variety of regulation-imposed by the central and the state
government. Some of the rules could be.

a. Essential Commodities Act, 1955: - The objective of the EC Act is to control


the production, supply, distribution of and trade and commerce in the essential
commodity.

b. Sugar (Control) Order, 1966: - The Sugar (Control) Order 1966 provides for
power to the government to regulate production of sugar, restrict sale etc. of
sugar by producers, movement of sugar and quality of sugar, call for information
from producer or recognized dealer, inspection, entry, search, sampling and
seizure of sugar and delegation of powers conferred by the Sugar (Control)
Order, 1966 to any officer or authority of the central or state government.

c. Sugarcane (Control) Order, 1966: - Sugarcane (Control) Order, 1966 provides


for price (SMP) for sugarcane purchased by sugar mills during each sugar season
(Clause 3), payment of interest at 15% per annum on amounts due beyond 14
days of delivery of sugarcane at factory gate.

• ECONOMIC ANALYSIS :
i. In India sugar is an essential item of mass consumption and the cheapest source of
energy, supplying around 10% of the daily calorie intake. With rising income India’s
sugarcane cultivation area of 4-4.5 million hectares (ha) accounts for 2.7% of India’s
cropped area.

ii. India is the second largest sugar producer in the world (after Brazil), an estimated
production of 18.6 mt in sugar year 2006 accounting for around 10-12% of world’s sugar
production.

iii. Sugar industry accounted for around 1% of GDP of the country during financial year
2005. Further, sugar industry contributes an estimated Rs. 17 billion annually to national
exchequer and treasuries of various state governments by way of excise duty and
purchase tax on sugarcane.

• SOCIAL ANALYSIS :

Sugar Industry has been a focal point for socio-economic development in the rural areas by
way of mobilizing rural resources, generating employment, providing higher income
opportunity, and transport and communication facilities. Further, many sugar factories have
established schools, colleges, medical centers and hospitals for the benefit of the rural
population. Some of the sugar factories have also diversified into byproduct based industries
and have invested and started distilleries, organic chemical plants, paper and board factories
and cogeneration plants. The industry generates its own replenish able biomass and uses it as
fuel without depending on fossil fuel.

i. Low prices and development outcomes: - Sugar production plays a key role in the
economics and employment of least developed countries. Low domestic or export prices
have knock-on effects on field and production labor. Where production is predominantly
small-scale, e.g. India

ii. Poor working condition: - Working in sugarcane plantation can be backbreaking work
with very poor wages. There may be significant exposures to agrochemicals, especially
herbicides, although this is less of a problem than with many other commodity crops.

iii. Impact on the ground water:-This is associated particularly with the growing of cane,
and also in the processing of both cane and beet. Sugarcane is deep rooted crop and uses
a lot of water; it is very sensitive to soil water deficits. In many areas it is usually from
100% of water by irrigation, although in other areas it is rainfed. The crop can have a
great impact on the river flow and the ground water. A recent study of irrigate agriculture
in selected river basin of high importance of biodiversity. WWF ranks sugar as the third
“Thirstiest” commodity crop, typically requiring 1500-3000 liters per kg of crop.

iv. Change in the cropping pattern: - It is essential to fallow the proper cropping pattern
crop rotation according to the agro climatic condition to improve the biophysical
properties of the soil and reduction in pest incidence, but in case of sugarcane production
because of its high value as cash crop most of the farmers have been started to take the
advantage. But this affects fertility of land by reduction in the production of biomass for
livelihood which could affect the social life.

v. Health impact due to burning of bagasse: - Bagasse used as a fuel in boiler. The
unburned particles comes out of the stack contains a silica which is very harmful. It may
create a serious health related problems. If pollution control equipment would not be
installed, fly ash escapes to the atmosphere and can affect the population with irritation in
eyes, nose, throat and lungs and can damage crop.

• TECNOLOGICAL ANALYSIS :

i. For increased productivity, agronomic practices irrigation, weed control and fertilizer
application must be employed in a timely fashion. In Australia, double row planting is
carried out resulting in increased field productivity and other countries can benefit from
this practice. Soil and leaf analysis must be systematically carried out and fertilizer
recommendations adhered to closely.

ii. Indian sugar factories are going to adopt new time saving production techniques to
improve the production.

• ENVIORNMENTAL ANALYSIS :

i. Water Pollution

a. Agrochemicals and sediments can pollute nearby watercourses.

b. Most of the time it is observed that the sugar industries discharged their
wastewater i.e. spent wash during the rainy season in the nearby rivers and other
surface water bodies resulting in severe contamination of the surface water
resources.

c. Siltation and eutrophication of nearby surface water bodies due to soil erosion
due to flood irrigation and over irrigation.

ii. Water Scarcity

a. Sugarcane is a deep-rooted crop and can have a great impact on river flow as it
reduces run-off from the catchment into rivers and draws heavily on ground
water resources.

iii. Air Pollution

a. Burning of cane to speed harvest causes air pollution and increases erosion.

b. Bagasse, which is commonly used as fuel in boilers, produces fly ash, which
escapes to the atmosphere and can affect the population with irritation in eyes,
nose, throat and lungs, and can damage crops.

iv. Degraded Soils

a. Cane harvesting can cause a significant removal of soil with the roots. Declining
soil quality is associated with cane and beet production, due to soil compaction,
loss of organic matter, Stalinization and acidification. 10-30 percent of the total
beet harvest weight is soil.

b. Heavy infield transport machinery is most commonly associated with soil


compaction problems. Soil compaction decreases porosity and water infiltration
rate, restricting the rooting ability of the crop.
c. Sugarcane milling generates bagasse (Fibrous waste produces during the milling
of cane) as fuel in boilers, which produces particulate matter, nitrogen oxide an
sulphur, if pollution control equipment is not installed, fly ash escape to the
atmosphere and can affect the population with irritation in eyes, nose, throat and
lungs and can damage crop.

Opportunities in sugar industries

o High value of by-products for downstream industries.

o Huge potential to increase the productivity of cane and sugar recovery rate.
o Technology up gradation, new advanced technology available for the byproduct
utilization.

o Indian sugar industry is the second largest producer of sugar in the world after Brazil.
The sector has a potential to make the country to be self reliant in this highly sensitive
essential commodity of mass consumption.

o The sugar industry paid well over Rs. 122.69 billion to the sugarcane growers in the
financial year 2006.

o Annual tax contribution to exchequer Rs. 17 billion annually.

o Provides direct employment including ancillary activities to near about 0.5 million
workers.

o It also supports the downstream industries by providing the raw material.

o Sugarcane farming is more profitable than any other cash crop in India.

o This sector have been the focal point of socioeconomic development of the rural India.

o Strong government policies as it comes under essential commodity of mass consumption.

Threats to the sugar industry

o Sugar sector is vulnerable to political interest.

o Ground water availability for irrigation.

o Quality of soil deteriorates due to overuse of fertilizer and pesticides to increase


sugarcane yield.

o Unhealthy competition between members of the society.


o Most of the Co-operative sugar industries in India e. g. in Maharashtra find difficult to
pay for the sugar cane supplied by the farmers.

o Most of the sugar factories are more then 30 years old and still using the old technology
low installed production capacity leads to the decrease in production and losses.

o Lack of professionalism.

Measures adopted by Indian company in sugar industry to convert its


threats into opportunity

1. In the production process of sugar many by products such as molasses and baggage’s generated
which has no use. Such kind of by products are frequently used in making quality wines and
liquor which is highly demanded in domestic as well as foreign market.

2. After crushing the sugarcane the dry waste material used as a fuel instead of coal or petrol which
are limited in resources.

3. Innovation of new kind technology for the irrigation of sugarcane to encourage the farmer to
enhance the farming process of sugarcane.

4. It helps a lot in employment generation for the people living in rural areas which ultimately
increase the standard of living of poor people. Opening of sugarcane production unit in rural
areas contributing to the growth of national economy.

Bibliography

1. www.sugarindustry.com
2. www.trivenigroup.com
3. sugarinds.blogspot.com
4. www.emt-india.net/process/sugar/pdf/The%20Sugar%20Industry.pdf
5. www.sugarindia.com/sugar_industryindia.asp
6. www.iitk.ac.in/hss/research/theses/Abstract/rais%20mohammad.pdf
7. www.tespl.com/Sugar%20Industry.htm
8. Book of business environment written by salim sheikh .