Indian sugar firms upbeat on bioenergy and biofuels

Simbhaoli Sugar Mills Ltd., one of India's top sugar firms, announced it is investing 4.23 billion rupees (€72 / $95.6 million) to ramp up ethanol, sugar and biomass electricity output. The company will boost ethanol production to 210,000 tonnes annually by April 2007 from the current 90,000 tonnes, said Sanjay Tapriya, finance director. Another Indian firm, Triveni Engineering and Industries Ltd., for its part announced it expects its power co-generation and ethanol businesses to contribute 15 percent of annual revenues by 2010.

As part of an ambitious bioenergy program (earlier post), India is rolling out a plan to boost the mixing of ethanol with fuels to cut its dependence on crude oil imports, and sugar firms are rushing to take advantage of the new market. But there are other, policy-related reasons why India's sugar companies are investing in ethanol and bioenergy:

• The Indian government fixes a floor price which sugar companies must to pay to cane farmers, another reason why sugar firms are diversifying into ethanol and power to mitigate risks as domestic sugar prices have not risen as fast as prices paid to farmers for sugarcane.
• The Indian government recently imposed a ban on sugar exports, but many expect it to be lifted before the end of the year. Global sugar prices have fallen to about $390-$400 a tonnne from $500 in July. Even when the ban is lifted, sugar prices are not expected to rise. Such wavering sugar policies have posed risks for mills, which is why sugar companies are focusing on areas like ethanol production and power co-generation.

Given this context, let's have a quick look at how some of India's largest sugar producers are reacting by diversifying into bioenergy and ethanol production:
ethanol :: biomass :: bioenergy :: biofuels :: energy :: sustainability :: sugarcane :: bagasse :: co-generation :: India ::


Triveni:
-has four sugarcane crushing mills in Uttar Pradesh, and is the second-largest sugar firm in India, the world's second-largest producer and biggest consumer
-Triveni is setting up its first ethanol distillery with a production capacity of 160,000 litres a day by February 2007
-It is ramping up the capacity of its power co-generation unit to about 67 megawatts of electricity; the feedstock is sugarcane bagasse, a residue
-The company sees triple-digit growth in 2006/2007 profit and sales for its engineering business and a stabilisation of net margins in its sugar business

Simbhaoli:
-owns three sugar units, three distilleries and two power co-generation units in northern Uttar Pradesh
-is investing to raise capacities of sugar mills, distilleries and power co-generation plants and sees distinct opportunities in all three diverse areas for an integrated sugar company
-the company is raising its sugar output to 20,100 tonnes crushed per day (tcd) from 11,000 tcd, while it is ramping up power co-generation capacity to sell about 36 MW of electricity

India is the world's largest consumer of sugar, and its second largest producer, after Brazil. The country is likely to produce 22.7 million tonnes of sugar in the crushing season that began in October against 19 million tonnes in the last season, industry officials have forecast. According to the FAO, the country's sugarcane industry employs some 35 million farmers and their families, concentrated in two main growing areas (click map).