News: Sugar foray by Reliance not ruled out

(BL 01/06/2006) New Delhi - Reliance Industries Ltd (RIL) has apparently not ruled out producing sugar from its ethanol manufacturing facilities slated to come on steam from the 2007-08 crushing season (October-September).

"To begin with, the three proposed sugarcane processing units in Pune, Osmanabad and Kolhapur will only manufacture ethanol through direct fermentation of the cane juice. But they have not ruled out entering sugar as well at an opportune time," sources said, following a meeting between RIL officials and the Union Agriculture Minister, Sharad Pawar, in Mumbai on Wednesday.

The meeting, held at the office of the Maharashtra State Co-operative Sugar Factories Federation Ltd (MSCSFF), was also attended by representatives of the Indian Sugar Mills Association and companies such as Praj Industries Ltd, Shree Renuka Sugars and Ugar Sugar Works Ltd.

Maharashtra's leading sugar barons, including the Finance Minister, Jayant Patil, and the Rural Development Minister, Vijaysinh Mohite-Patil, were also present at the two-and-a-half hour long `brainstorming session'.

The RIL side was represented by the heads of its agri-business and speciality chemical divisions, Sanjeev Asthana and R.P. Sharma, respectively.

In its presentation, RIL is said to have indicated that the proposed three plants would have capacity to crush between 10,000 and 12,000 tonnes of cane daily (tcd) each.

Apart from sugarcane, the plants would also use other substrates, including sweet sorghum and damaged grain, for which companies such as Praj have already developed technologies.

More to assure co-ops

"This was more to assure existing sugar co-operatives that RIL's entry would not have an adverse impact on their cane supplies," the sources added.

The sugar industry has, in fact, expressed apprehensions on this count, as the Sugarcane Control Order, 1966, is applicable only to units making sugar, gur and khandsari from cane. Since the order does not mention ethanol, RIL's plants would technically not be bound by regulations reserving cane zones for individual factories and stipulating a 15-km minimum radial distance between neighbouring mills.

Preparing for competition

When contacted, the Managing Director of MSCSSF, Prakash Naiknavare, said the co-operative mills would undertake an internal review of the presentations made. "Today's meeting was our own initiative to understand RIL's plan. We have not taken any final view, though probably we may have to be prepared for competition ahead," he told Business Line.

Ethanol is basically rectified spirit dehydrated to yield 99 per cent plus pure alcohol, which can be used for blending with petrol. Spirit, in turn, involves fermentation of sucrose (sugar), followed by distillation. Currently, sugar mills in the country produce spirit by fermenting the sucrose remaining in molasses, a by-product during sugar manufacture. RIL's proposed venture aims at using up the entire sucrose present in the cane (about 13 per cent against two per cent through the molasses route) for fermentation. This would yield roughly six times more ethanol than what sugar mills are now able to produce.