Satara sugar co-op, German firm tie up for CNG

Satara-based Veer Kisan Ahir Sugar Cooperative (VKASCL) has recently inked a memorandum of understanding (MoU) with the German biofuel company, Biogas-Nord, to set up the country's first plant to produce compressed natural gas (CNG) from spentwash, a byproduct.

Spentwash is a semi-solid waste and its disposal is a big problem for sugar manufacturers.

Speaking to Business standard, Madan Bhosle, MLA and chairman of the sugar cooperative, said, "Biogas-Nord, in association with a private equity fund, Elephant Equity, will set up the Rs 27 crore plant to produce CNG (7,000 litres of diesel equivalent per day). The plant is expected to start functioning by the end of this year or early next year."

VKASCL will make available land, infrastructure and raw material for the project and, in return, Biogas-Nord will give 5 per cent commission to the sugar cooperative on total sales plus royalty on raw material.

The company hopes to gain a revenue of at least Rs 30,000 per day. The project can also get carbon credits for producing CNG through a clean fuel technology.

Considering the current glut in the sugar market worldwide and its cyclical nature, the only way forward for sugar cooperatives to remain competitive is to go for such kind of alliances, foray into power generation or ethanol manufacturing as an alternative source of revenue.

Bhosle said that once the project successfully started producing CNG, others would follow suit.