Global commodity major Olam Agri is investing around $60 million in a multi-input bio-ethanol unit at Rajgoli in Maharashtra. Olam currently operates a sugar factory with a crushing capacity of 4,000 tonnes per day at Rajgoli.

“In the recent past with the government policy of having mixed fuel and also having the mandate from B10 to B20 we thought possibly forward integrating into the bio-ethanol will be the right thing. We are investing close to $60 million in a multi-input capability distillery, which means that if the cane production is low, we can substitute that with corn and vice-versa,” Muthukumar Neelamani, Group CFO, Olam Agri, told businessline on the sidelines of the Samunnati FPO Conclave in Hyderabad.

Muthukumar said the Olam Agri is doubling its sugarcane crushing capacity to about 8,500 tonnes per day with the setting up of the bio-ethanol unit, which will be operational by March next year.

The Singapore-headquartered, global food, feed, fibre and ag-industry company operates in more than 30 countries. “India is a important market for us and we deal in rice, cotton, pulses, sugar and more recently bio-ethanol,” Muthukumar said.

Enhancing FPO Engagement

The Group CFO of Olam said the company is expanding its engagement with the farmer producers organisation in rice after it found success with its last year’s pilot initiative working with some 6,000 farmers, primarily tribals in Madhya Pradesh. This year, the company has tripled the FPO engagement with some six FPOs reaching out to about 11,000 farmers, Muthukumar said adding that the company wants to replicate it in cane industry and also in corn.

“We have been dealing with close to 25,000 sugarcane farmers since 2011,” Muthukumar said adding that the company has worked with agencies such as IFC and Solidaridad in educating farmers on sustainable agriculture practices and improving yields.

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