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In a bid to increase distillation capacity to meet rising demand for rectified spirit from both ethanol and alcohol manufacturers, a number of independent units have decided to set up grain-based distillery units. Rectified spirit is a by-product obtained from crushing cane to manufacture sugar.
The Union environment ministry had cleared proposals for investment worth Rs 3,000 crore during 2013-14. These projects are set to come on stream in 30 months. Grain-based distillery units use maize and rice as raw material to produce premium quality potable alcohol.
Kolkata-based Pincon Spirit (PSL) had infused Rs 30 crore to support the overall expanded business volume in 2013-14. The company has enhanced bottling capacity to 200,000 cases a month from 50,000 cases a month in the previous year, in addition to doubling bottling capacity at its subsidiary to 60,000 cases a month versus 30,000 cases last year. PSL plans to place its India-made foreign liquor (IMFL) brands in different state within a short span. To support this expansion, the company is contemplating various funding routes.
"We are looking to grab the opportunity through acquisition of small units and expand their capacity through fresh capital infusion. We have initiated negotiations with Mysore Sales International, a Karnataka government undertaking, for supply of alcohol in addition to our strengthening position in West Bengal," said Arup Thakur, director (finance) at PSL.
Besides PSL, other distillers such as Nadhi Bioproducts and Gulshan Polyols are also setting new plants. While the former plans to set up a 60 kilo litre per day (klpd) plant at Mahbubnagar in Andhra Pradesh, the latter will set up a grain-based distillery unit at Chindwara in Madhya Pradesh.
The move to implement the biofuel programme, which entails five per cent mandatory blending of ethanol with petrol, is expected to result in a 1,000 million litre-deficit of alcohol, which be diverted to ethanol producers.
"In case the government makes 10 per cent ethanol blending with petrol mandatory, another 1,380 million-litre deficit would arise. These producers are anticipating the deficit two years down the line as plant construction time and have started preparations now," said Deepak Desai, chief consultant, ethanolindia.net, a leading consulting firm in ethanol.
Meanwhile, the Cabinet Committee on Economic Affairs (CCEA) on Thursday raised ethanol prices by Rs 1.50-2 a litre to boost the blending programme.
"Looking at the circumstances ahead, we see bright future for both grain, and molasses-based IMFL producers ahead," said Desai.
