With capacity utilisation of 70% in the 1 st phase Bhagauli Sugar Mill has molasses (4.5% on cane), press mud (3.5% on cane) and surplus bagasse as byproducts. BSDL converts its byproducts into value added products in order to maintain the healthy financial strength of the project.

M/s Bhagauli Sugar and Distillery Ltd., commissioned in 2006 is an 5000 TCD mill and is targetrd to a capacity of 8000 TCD with a seasonal crushing of atleast 8,00,000 tonnes sugar cane. Thus, total reducing sugars in the molasses is expected to be around 44% with fermentable sugars as 40%. It is considered that the molasses availability from surrounding sugar mills within a radius of 80 km would be around 2,70,000 tonnes in a season and as such enough molasses can be procured to sustain a much bigger capacity distillery with round the year operation.

In this connection the management has taken up a cogeneration project and has also obtained a licence for establishing a distillery to produce rectified spirit and pottable liquors based on sugar cane molasses. The distillery will be operational all around the year alongwith bottling operations and hence it is designed as a stand alone distillery but with common management. The distillery is therefore dependent on sugar mill for the raw material and fuel (bagasse). As the distillery is to operate round the year, its capacity is also being envisaged reasonably high enough compatible with potable liquors lincence capacity and subject to probable availability of molasses from the neighbouring sugar mills. Thus the distillery is envisaged to produce 30,000 KL of rectified spirit per year (100,000 LPD). Out of this 7,500 KLPY will be Extra Neutral Alcohol (ENA) and the balance will be for potable liquor (country liquor) manufacture.