Economies of Scale in Co-operative Sugar Industry of Maharashtra

This study has estimated the costs, returns and net returns from sugar production in different sizes of cooperative sugar factories in Maharashtra. To look into the economies of scale in these sugar factories, data were obtained from the annual reports of 51 co-operative sugar factories for five years, viz. 1990–91 to 1994–95. These factories were grouped based on their installed capacity into 3 size-groups, viz. small (800–1750 t/day), medium (17512500 t/day) and large (>2500 t/day) The production performance of a factory was studied based on utilization of installed crushing capacity, sugarcane crushed, sugar production and gross and net cost of production. The comparative economics of sugar factories has been analyzed with the help of total costs, gross receipts and net profit. The breakeven analysis, internal rate of return on capital investment, profitability potential and the optimum size of the sugar factory have also been estimated.