The Puducherry Cooperative Sugar Mill at Lingareddypalayam has decided to set up an ethanol plant with the support of a Public Sector Oil Company.

A proposal to this effect has been sent to the government, seeking permission to involve public sector undertakings to produce ethanol by utilising molasses at the sugar mill. The move is expected to offset a portion of loss of the mill, which has already crossed a whopping Rs. 150 crore.

As per the proposal, one of the leading petroleum companies - Chennai Petroleum Corporation, Indian Oil Corporation or Hindustan Petroleum - will be involved in setting up the ethanol plant in the campus of the mill. While the sugar mill would provide land and molasses, which was the main raw material for producing ethanol, the oil company, which is yet to be identified, would set up machinery for the ethanol unit.

The plant could be run by a separate board consisting of senior officials of Puducherry government, Copperative mill and the oil company, which would be an active partner in the new initiative, say official sources.

According to a top source, the government was keen to push the proposal since the petroleum companies have been following professional approach coupled with better managerial skills in operating ethanol plants.

M. Rajasekar, Managing Director, PCSM Ltd told The Hindu that a couple of meetings had been held to discuss about the prospects of the proposal which was with the government. Out of the 120 acres owned by the mill, 20 acres could be utilized for the ethanol plant. The entire expenditure of setting up the ethanol plant would have to be met by the oil company. Since the government had already been spearheading ethanol blending programme with petrol, there would be absolutely no problem for marketing ethanol. There was a huge demand from the oil marketing companies for meeting out the five percent ethanol blending programme which was made compulsory, he noted. The mill could get 40 percent subsidy for setting up of ethanol plant as it was a clean renewable energy. The mill has been getting around 10,000 MT of molasses from the sugar cane crushed.

It was being auctioned every year and bought by private players for cattle feed. It fetched around Rs. 4,300 per MT. If it was produced as ethanol in the sugar plant, the dividend could be at least 10 percent more than selling molasses, Mr. Rajasekar said.

M. Sooran, Chairman, Puducherry Cooperative Sugar Mill, said it could be a good revenue source for reducing the loss of the mill to an extent. Chief Minister N. Rangasamy, who had been apprised of the move, would take a decision soon. Once the government cleared the proposal, the mill authorities would approach the petroleum companies, he said.

  • Petroleum companies to be involved

  • Chief Minister to take a decision soon