KARACHI, Sept 22: The Sindh ministry of industries has given NOC for setting up five sugar mills in the interior -- three in Ghotki district, one in Naushehro Feroze and one in Tando Ghulam Ali. This will bring the total number of mills to 32 in the province.

New sugar mills had been banned in the province since 1990s due to shortage of sugarcane and the over capacity of existing mills.

The scarcity of sugarcane not only triggers a tug of war among mills to acquire maximum cane but results in cane prices spiralling to new heights.

However, since sufficient production from existing mills failed to bring the sugar prices down, the government was forced to import the sweetener and also decided to encourage investors to set up new mills, especially in Sindh and Punjab.

Additional Secretary of Industries Murli Manohar told Dawn on Saturday that the decision to allow new mills was aimed at expediting the process of industrialisation in the province and to provide employment to local people.

He said sugar mill was the only industry suited to the agri-based areas and no other major industry has emerged in the interior since several decades. This had blocked the process of industrialisation.

When asked if the permission for new mills would fuel the existing friction between growers and mills, the senior ministry official said owners of new mills had been bound for the first time to have one representative of the growers on their board of directors.

The step has been taken to safeguard the interests of the growers against the new mill owners.

Another condition laid down for the new mills is that they will use locally manufactured plants for mills and their capacity should not exceed 5,000 to 6,000 tons crushing per day (TCD).

Owners have also been bound to start operations within two years of the permission.

It may be pointed out that the ministry did not consult or inform the Pakistan Sugar Mills Association before giving NOC to five new mills.

Sources in the ministry said the government has problematic relations with the PSMA due to cartel-like behaviour of the existing sugar mills so it decided to lift ban on setting up new sugar mills.

When asked about the problem of non-payment to growers by the mills for purchase of sugarcane during the season, sources said according to a report by the Cane Commissioner, 92 to 95 per cent sugar mills had paid cane dues to growers during the last season and there were only five per cent mills defaulting the payment.