Ethanol plant needs tariff protection — sugar miller

Sugar producer Roxas & Co., Inc. will open its ethanol distillery in Negros Occidental by February next year, significantly boosting the country’s ethanol production.

At the sidelines of the company’s stockholders’ meeting yesterday, Roxas & Co. Executive Chairman Pedro E. Roxas said the plant will have a capacity of 100,000 liters of fuel ethanol a day or 30 million liters a year.

Unlike other ethanol distilleries, Roxas & Co.’s P1.6-billion plant will use molasses instead of sugarcane and has already attracted the attention of oil companies.

Mr. Roxas pointed out that the potential market for E10, or gasoline mixed with ethanol sold at the pumps as mandated by law, is around 450 million liters a year.

But the company, along with other ethanol producing firms, is seeking the government’s support to protect them from the influx of ethanol from other countries, seeking the imposition of higher tariffs.

Mr. Roxas said the group has requested a 20% tariff on imported bioethanol to protect the local industry, which he said could not compete with major ethanol-producing countries like Brazil, which itself has a 30% tariff.

“This is to encourage investors and to align us with other countries that have similar tariffs. The 20% is not an unreasonable request and the idea is to allow the industry to grow and get the investors to come in,” Mr. Roxas said.

The Ethanol Producers Association of the Philippines, where the company is a member, has already raised the issue before the Tariff Commission.

“Discussions are ongoing but we are hoping that before the end of the year, the government will have a decision,” Mr. Roxas said.

Meanwhile, Mr. Roxas expressed optimism that next year would be good for the sugar industry, saying sugar prices have gone up significantly this year because of typhoons that hit India and Brazil.

From an exporter of sugar, India has become a sugar importer.

“We expect [the price trends of sugar] to be the same next year.

Beyond that however is difficult to predict,” Mr. Roxas said.

Prices of sugar now stand at P2,000 a bag, from P1,450 per bag last year.

The Roxas group, one of the biggest sugar producers in the country, said it was aware of what looms ahead especially next year when tariff rates plunge to near zero as a consequence of a regional free trade agreement.

“Undaunted by the speculation that local manufacturers will likewise drop side by side as the sugar arena become more competitive, the group is working intensely to be a major presence when 2010 comes.

Strategies have been formulated and currently being implemented to achieve the desired target,” the company said.

Among the measures taken up was the purchase of second-hand mills last year to enhance milling capacities. The company said it was also expanding its market reach by strengthening its traditional market and capturing more industrial customers. -- K. J. R. Liu

source: bworldonline