BUSINESS ENVIRONMENT

PROJECT

BY
PRATHEESH RAJ
23397129
MBA 1ST YEAR
SECTION- A
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Contents

Introduction: ...................................................................................................... 3

Sugar Milling Business Overview: ....................................................................... 3

Political Factors: ................................................................................................. 3

Environmental Factors: ...................................................................................... 4

Social and Cultural Factors: ................................................................................ 5

Economic Factors: .............................................................................................. 5

Technological factors: ........................................................................................ 6

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Introduction:

I opted for the sugar milling business because of my agricultural background,

allowing me to comprehend the intricate processes involved. Moreover, the
presence of numerous sugar cultivators in close proximity to my area enables
me to witness the entire production-to-sales process first-hand.
The aim of this assignment is to analyse and explore how trends across socio-
political, economic, legal, environmental, and technological dimensions
influence the sugar milling business.

Sugar Milling Business Overview:

The process of sugar production involves harvesting and procurement of

canes, wasjing and initial preparation of canes, jusice extraction from canes,
purification if the juice, clarification of the juice, boiling and concentration,
crystallization, centrifugation, drying and granulation and packaging.
The packaged sugar is then sold domestically within the country and are also
exported.
The sugar production process generates valuable by-products such as bagasse,
molasses, pressmud utilized in industries including bioenergy, fertilizers, and
food production.
India is the worlds second largest producer of sugar and exporter also.
Some of the notable sugar companies in india ar balrampur chini mills, EID
parry, shree renuka sugars, sakthi sugars.

Political Factors:

Government policies, regulations, political stability, and legal frameworks can

significantly impact the business.

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EBP TARGET OF GOVERNMENT:
India has fixed a target to increase ethanol content in petrol (ethanol blended
petroleum) by 20% by 2025. This is in view to reduce the pain of high crude oil
costs and to reduce air pollution.
Sugar industry is the major producer of ethanol as it is the by-product of sugar
production process. Therefore this policy increases the demand for ethanol
and it affects the business positively.
SUGAR EXPORT BAN:
On October 18, 2023, the Ministry of Commerce and Industry and the
Directorate General of Foreign Trade (DGFT) amended the export restriction
on sugar beyond October 31, 2023, to an indefinite period.
This move by government is to meet domestic demand for sugar as the
production of sugar is low this year.
This can negatively affect the exports side of the business.

Environmental Factors:

Environmental factors are becoming increasingly important as the world is

facing global warming and climate change. This includes concerns related to
sustainability, climate change, and environmental regulations.
MONSOON FAILURE:
Sugarcane is a water intensive crop. The crop requires 2000mm to 3000mm
water per annum per hectare. The monsoon rains this year is very late and
skewed (unevenly distributed) and this has affected the sowing and production
of sugarcane in the key producing states.
This reduction in sugarcane production can negatively affect the business as it
sugarcane is the raw material for the industry.

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Social and Cultural Factors:

SOCIETAL TRENDS:
A 2019 survey by the American Heart Association found that millennials are
more likely to engage in healthy behaviours, such as regular exercise and
maintaining a healthy diet, than in previous generations.
As people are becoming more health conscious, there’s a rising demand for
healthier alternatives to sugar like brown sugar, palm sugar, jaggery, honey
.etc.
This can lead to reduce in consumption of sugar.

CULTURAL PRACTICES:
India is a land of festivals. In many festivals, people celebrate by exchanging
sweets and preparing various delicacies. During Pongal/Makar Sankranti,
sugarcane is consumed by people in Tamilnadu.
This surge in demand leads to increase in production and sale of sugar across
the country.
Understanding these cultural norms can helps the business to tailor their
products to meet the demand of the consumers.

Economic Factors:

INFLATION RATE:
According to the World Bank, fertilizer prices have increased nearly 30% since
the beginning of 2022. But in India, government has set the fertilizer rate lower
than the last year. So in the case of fertilizer there is no problem.

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According to the ministry of labour, retail inflation for farm workers rises to
7.37% in November. This can lead to increased production cost for farmers.
This can potentially lead to the increase in sugar prices.
ECONOMIC GROWTH:
The Reserve bank of India has forecasted a 6.5% economic growth for the year
2023-24 and 2024-25 fiscal years.
A growing economy generally means higher consumer spending power, which
can positively impact the demand for sugarcane products.

Technological factors:

NEW IMPROVED VARIETIES:

Sugarcane is propagated through cuttings. The seed material of sugarcane is
called setts.
Continuous research in agriculture leads to development of new varieties that
can withstand drought, flood, diseases, and hybrid varieties that yield more
can positively affect the sugarcane milling industry.
New varieties have higher sugar recovery percentage and gives more yield.
SUSTAINABLE SUGARGANE INITIATIVE (SSI):
Sustainable sugarcane initiative is an innovative method of sugarcane
production using less seeds, less water, and optimum utilisation of fertilizers
and land to achieve more yields.
By using this method for cultivation, cost of cultivation can be significantly
reduced.

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