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

A proposal to the effect has been sent to the government, seeking permission to involve public sector undertakings to produce ethanol by utlising molasses at the sugar mill. The move is expected to lead to the offset of 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 from Chennai Petroleum Corporation, Indian Oil Corporation and others will be involved to set up ethanol plant on the campus of Puducherry Cooperative Sugar Mill. While the mill will provide land and molasses, which is the main raw material for producing ethanol, the Public Sector Undertaking, which is yet to be identified, will set up machinery and others for the ethanol unit.

It can be run by a separate board consisting of senior officials of Puducherry government, cooperative mill and the public sector undertaking, which is to be an active partner in the new initiative. According to a source, the government is also keen to push up 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 the prospects of the proposal, which was with the government. Out of 120 acres owned by the mill, 20 acres could be utilized for the ethanol plant. The entire expenditure of erecting ethanol plant would be met by the PSU. Since the government had already been spearheading ethanol blending programme with petrol, there would not be any 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.

It could get 40 percent subsidy for setting up of ethanol plant as it was a clean renewable energy. The mill had been getting around 10000 MT of molasses through the sugar cane crushing from the mill. It was being auctioned every year and bought by private players for cattle feed. It fetched around Rs.4300 per MT. If it produced ethanol in the sugar plant, the dividend could be at least 10 percent more than selling molasses.

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.

The Chief Minister N. Rangasamy, who had been apprised of the move, might take a decision soon. The mill authorities would approach the petroleum companies for finding a suitable partner.

A proposal has been sent to the government, seeking permission