Renuka sugars first, HPCL plan ethanol unit in Maharashtra

First such tie-up between a sugar and a petroleum company.

Shree Renuka Sugars is looking to set up an integrated sugar-cum-ethanol plant with oil marketing company Hindustan Petroleum Corporation (HPCL) in Maharashtra. This would be the first such tie-up between a sugar and a petroleum company.

Renuka will hold 76 per cent in the joint venture (JV), while state-owned HPCL will have the rest. "It will be a flexible unit, where we can produce up to 50 per cent ethanol and the rest can be sugar. We are renewing the 2008 memorandum of understanding (MoU) with HPCL. The project had been delayed, but we are working on it now," said Narendra Murkumbi, managing director, Renuka Sugars.

In September 2008, Renuka Sugars had signed an MoU with HPCL for setting up of an integrated plant.

Narendra MurkumbiIt has offered to supply 120 million litres ethanol, the biggest in the latest round of bidding, to oil marketing companies for blending it with petrol. The sugar industry has offered to supply around 1,000 million litres ethanol to oil marketing companies for blending it with petrol. This is more than the 860 million litres required for blending the government-prescribed five per cent ethanol with petrol. The oil marketing companies, however, had invited bids for the supply of 1,050 million litres.

HPCL keen to set up more ethanol facilities
HPCL, which has invested in reviving two sugar mills in Bihar, is looking to take over more such units in some of the southern states to expand its ethanol capacity.

"We are exploring opportunities in Andhra Pradesh, which has some sick sugar mills. When we conceived the Bihar project, we had a price of Rs 21.50 for a litre of ethanol in mind. Now, we will be getting Rs 27 per litre. It is a good price. We therefore plan to set up more such units and supply ethanol to oil companies for blending," said an official at HPCL.

In 2008, the company had acquired two sick mills from the Bihar government on a 60-year lease, extendable by another 30 years. The mills are at Sugauli in East Champaran and Lauriya in West Champaran districts. The company had paid about Rs 95 crore for these two mills.

Along with sugar and power, the two mills will produce about 60 kilolitres of ethanol per day. HPCL is investing over Rs 600 crore in reviving these mills and setting up new facilities. The new facilities are expected to be operational by December.

source: BS