Sugar Industry In South Optimistic

Hyderabad: With the 10 per cent blending of ethanol with petrol norm appearing on the horizon, SISMA (South Indian Sugar Mills Association) has decided to counsel its members on tapping this opportunity.

N Nageswara Rao, the newly elected President of the association, told Business Line that the Southern states had an additional advantage of close proximity to big refineries on the East coast. Estimates put the requirement of ethanol for 10 per cent blending at 1,100 million litres and for five per cent at 550 million litres. While making five per cent blending mandatory with immediate effect, the Government last week said the bar would be raised to 10 per cent from October next.

Though SISMA has about 180 member mills, only 18-20 have the required equipment to produce ethanol from sugar cane. “The cooperative sector is beset with financial crunch to upgrade their facilities in order to produce ethanol,” he said.

The situation, however, is not bleak. “About 80 ethanol making units would come up in the next six months. Orders have been placed for the equipment. They will be on steam for the next season. Of the 80 plants, 15 would be coming up in the South,” Nageswara Rao said.

The package would also help the industry to seek carbon credits for additional income. Stating that the move came at the right time when the sugar sector was saddled with the problem of glut, he said the ethanol blending programme offered an assured and higher income.

As against an income of Rs 1,600 from a tonne of cane, sugar gives about Rs 1,200. There is a huge potential for exports too. A tonne of ethanol would give $350. The association, however, was apprehensive on the implementation of the mandate by the oil companies.

AP gets Rs 270 crore

Incidentally, the Union Government last week announced Rs 270-crore package for Andhra Pradesh for modernising five cooperative sugar factories in Visakhapatnam, Vizianagaram, Nellore and Chittoor. The funds are to be utilised for upgrading the facilities with co-generation and ethanol making features.