Simbhaoli Sugars opens third molasses plant for ethanol

New Delhi, India’s Simbhaoli Sugars (BOM:507446) said today it started production at its third plant to process molasses into ethanol and alcohol in Northern India's Uttar Pradesh.

The Rs 40 crore ($840,000 USD) Brijnathpur distillery brings the sugarcane processor's total ethanol production capacity to 210 kiloliters (55,500 U.S. gallons) per day.

The plant is adjacent to the company's sugar crushing plant. Its Simbhaoli and Chilwaria sugar complexes generate 64 megawatts of energy from bagasse, of which 33 MW are sold to the state electric grid.

Oil imports account for 77 percent of total fuel consumption in India, so the government has encouraged the production of ethanol to increase supply and lower prices.

India’s government is also pushing molasses-based ethanol because it doesn’t impact the food supply, takes little water to manufacture and reduces emissions. Those efforts, however have been shelved as ballooning molasses prices slow the government's goals of a 10-percent ethanol content in fuel (see India to delay October's ethanol mandate).

The sugarcane crushing season began in October. The price of sugarcane, the basis for molasses, has gone up 40 percent to 50 percent so far this year.

Still, a number of new players are entering the market in anticipation of the government mandate, which could take effect next year except in the Jammu, Kasmir and the northeast states (see Tata Chemicals hires Praj to build ethanol plant in India).

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