The Hindu Business Line : Sugar millers hopeful of gasohol programme launch

The South Indian Sugar Mills Association has represented to the Tamil Nadu Government to approve production of larger quantities of anhydrous ethanol to cover the entire State under the programme.

Chennai , Oct. 31

SUGAR millers in Tamil Nadu are optimistic that the programme to supply ethanol-blended petrol would be launched with the oil companies getting closer to purchasing ethanol from the mills.

This follows a meeting between oil companies and sugar mills last week when the price bids were discussed.

The sugar mills had quoted about Rs 18.75 a litre of anhydrous ethanol. The programme could take off by the month end, say sugar industry sources.

According to sugar mill representatives, the South Indian Sugar Mills Association has also represented to the Tamil Nadu Government to approve production of larger quantities of anhydrous ethanol to cover the entire State under the programme.

They said the oil companies have asked the sugar millers if their distilleries could produce enough to cover the entire State under the programme. This would mean supplying about four crore litres a year.

Now the five distilleries, attached to sugar mills, that are cleared to produce anhydrous ethanol make about two crore litres of it - enough to bring seven districts under the ethanol programme. Their total capacity is estimated at about five crore litres. But the State Government has to clear this production.

Earlier, when the ethanol programme was launched the sugar mills had been going through a low in sugarcane production due to drought. This also hit production of alcohol.

But during the 2005-06 season, which has started this month, they are expected to hit a high with sugarcane production expected to be close to about 200 lakh tonnes. Therefore, generation of molasses - the raw material for alcohol - would be enough to meet the requirement of all the segments including potable alcohol, industrial users and the oil companies.

Sugar production is estimated at about 18 lakh tonnes this season and molasses production about nine lakh tonnes.

This would generate about 24 crore litres of alcohol. This is more than enough to meet the needs of the potable alcohol industry, the Indian Made Foreign Liquor manufacturer, which needs about five crore litres. The demand from the industrial units is small, representatives said.

Therefore, the situation is comfortable, they said. This is also the reason the ethanol programme has come as a boon to sugar mills. It would help to siphon off significant quantities of ethanol from the market and buoy up prices, which would otherwise take a dive when alcohol production is in surplus.

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