MUMBAI: In a move that could delight sugarcane growers and upset entrenched sugar co-operatives, the Mukesh Ambani-led Reliance Industries (RIL) wants to enter the sugar sector, and is planning operations in three states.

The company is eyeing three plants with a capacity to crush 10,000-12,000 tonnes of sugarcane per day in Maharashtra and will later enter Karnataka and Andhra Pradesh. RIL, along with its acquired unit in Pune, will soon have two more plants, at Kolhapur in western Maharashtra and Osmanabad in Marathawada. However, it is not known whether RIL will take over existing plants or set up its own units.

As reported by ET on Wednesday, RIL presented its business plan before sugar barons — both from private and the co-operative sectors — and Sharad Pawar, the Union agriculture minister. The meeting was a part of an exercise to familiarise the sugar industry about the company’s proposed foray.

To begin with, the company will concentrate on producing ethanol which will soon be used as petrol additive. This, industry sources say, is to supplement the RIL’s petroleum business. At a later stage, it also wants to get into sugar production to aid its proposed retail operations.

Wary of the company’s financial muscle, the state’s sugar industry wanted RIL to come clear on the issue. Accordingly, the sugar producers’ federation on Wednesday convened a joint meet where two senior officials — Sanjiv Asthana of Reliance Agro and RC Sharma of Reliance’s petro business — gave a presentation to the audience.

A company spokesperson refused to disclose what transpired in the meeting. However, according to sources, RIL is understood to have made it amply clear its intentions. Initially, the company plans to use SM Dyechem’s Pune unit, which it acquired last year, to produce ethanol. Simultaneously, it is also hunting for two more units to augment its capacity.

Besides using sugarcane to produce ethanol, the company is exploring other options, such as grains to produce this petrol additive. In this connection, RIL has begun talks with some of the companies in the sector, the sources said. The meeting also witnessed Mr Pawar asking sugar barons to reform.

“It’s high time the state’s sugar sector changes the way it is being run. With strong competition coming in from the private sector, the sugar co-operatives will have to transform their institutes into professionally-managed bodies,” Sharad Pawar told the gathering.

These days, the highly-politicised sugar industry has been receiving sever flak for its incompetence. More than 50 of the state’s 160 sugar co-operatives have been reported sick.

Mr Pawar also asked the gathering to explore other avenues. “Instead of running units for producing only sugar, the co-operatives should look at ethanol and energy as major options. Soon, sugar should be your by-product,” he said.

The meeting seems to have had its desired effect as sugar co-operatives’ chairmen, who were gathered at the meeting, agreed to pay more to sugarcane growers.

“We will have to take a fresh look at how we run our business. The impending competition will make us more competitive,” Prakash Naiknavare, MD of the apex body of sugar co-operatives, told ET.

The state’s sugar commissioner, central secretaries of the departments concerned, state finance minister Jayant Patil and rural development minister Vijaysinh Mohite Patil, who is also the chairman of the ethanol producers association, were present during the day-long meeting. A large number of private sugar producers and technology providers also attended the meeting.