Firms to focus on ethanol

Gujarat-based sugar factories would focus on ethanol and raw sugar production in 2007-08, Habib Badi, Managing Director, Gujarat State Sugar Industries Federation said.

"Some of the factories have already started producing raw sugar in small quantities and are equipped to scale it up as per demand," Badi said.

According to him, prospects of raw sugar exports to refineries in Saudi Arabia, Egypt and Indonesia have increased in the recent past.

"Ethanol production for bio-fuel manufacturing is also a good opportunity for sugar millers in the state," Badi added.

The demand for unprocessed raw sugar is growing from refineries located in countries such as Saudi Arabia and Egypt.

Indian Sugar Exim Corporation has already entered into a contract to supply 300,000 tonnes of raw sugar to Al-Khaleej Refinery in Dubai.

"We are at a surplus state in sugar production and hoping to get a good chunk of export order from the corporation," he said.

Badi said that India won the contract from Al-Khaleej refinery due to locational advantage in comparison with Brazil.

"Though Brazil is the largest producer and can supply cheaper sugar, the cost advantage in freight attracted West Asian buyers to India," he said.

The saving on freight adds up to $35 a tonne if refineries in West Asia import sugar from Indian shores rather than from Brazil.

Badi said that if the corporation allocates substantial quota for Gujarat the state sugar millers will be able to fulfill the export demand.

"We have conducted workshops and training sessions for technical staff of sugar millers in Gujarat to step up raw sugar production," he added.

Badi said that mills in the state produce 65,000 tonnes of sugar a day and can meet any kind of export commitments.

"There is no additional investment required to produce raw sugar. It can be achieved through terminating the process before sulphur treatment," he said.

Gujarat produced 1.42 million tonnes of sugar in 2006-07 (April-March), up 2,61,000 tonnes from 2005-06, Badi said.

Sugar mills in Gujarat are also focusing on ethanol production to tackle excess molasses output.

"Sugar production generates molasses as a by-product but surplus production leaves us with large quantity of molasses," he said.

Sugar mills in Gujarat have lined up ethanol supply contracts with state oil companies to manage surplus molasses production.

"We have the capacity to produce 255,000 litres of ethanol per day," he said.

"Brazil has been doing it for a long time, but we have started looking at it after bio-fuels came under focus in the country," Badi added.

He said that demand for ethanol production for bio-fuel came as a boon for the sugar millers in Gujarat.

"Treating molasses was troublesome for us due to the absence of liquor breweries on account of prohibition in the state," Badi added, saying that ethanol for bio-fuels has solved the issue.