The Hindu Business Line : TN permits 5 sugar mills to raise alcohol output

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TN permits 5 sugar mills to raise alcohol output

R. Balaji

Chennai, Nov 20 Five private sector sugar mills in Tamil Nadu and three standalone distilleries have been allowed to expand their alcohol production capacities, according to sources in the know.

Apart from being the single largest distillery expansion permitted by the State Government in the last decade, the move is significant in that it will address two key issues for sugar mills, say industry sources.

Increased alcohol output would mean surplus available to start the ethanol-blended petrol programme, which represents an additional revenue source for the mills; and increased use of molasses, which piles up every time there is a bumper sugarcane crop, as for instance, in the current year. Molasses build up is a serious environmental concern for the mills.

Through an order issued last week, the State Government allowed three distilleries linked to sugar mills and three stand-alone distilleries to increase their output by 30 kilolitres a day each.

The sugar mills are: Dharani Sugars and Chemicals Ltd, Sakthi Sugars and EID Parry (India) Ltd. The three stand-alone distilleries are Mohan Breweries and Distilleries Ltd, Southern Agrifurane Industries Ltd and Bhavani Distilleries and Chemicals Ltd.

Two sugar mills, Bannari Amman Sugars and Rajshree Sugars and Chemicals, have been allowed to expand their distilleries by 12.80 kl and 15 kl a day.

There are 14 distilleries in the State with the monthly output at about 1.5 crore litres a month.

This would increase to about 2.20 crore litres once the expansion comes on line.

The State Government has said in the order that the output from the distilleries is inadequate to meet the requirements.

Annual production of alcohol is over 19 crore litres with the estimates for the ethanol-blended-fuel programme – at five per cent blending – at about six crore litres a year.

Also, the Central Government has announced that the blending percentage would soon increase to 10 per cent.

Last year, the sugar mills had contracted with oil companies to supply ethanol at Rs 21.50 a litre.

But the programme did not take off because of concerns on availability of alcohol. In Tamil Nadu, the alcohol needed to produce Indian made foreign liquor is about 10-12 crore litres and mounting.

Higher revenues

According to official figures, in 2006-07, the revenue to the State Government from excise and sales tax on liquor grew by 23 per cent to Rs 7,473.62 crore against Rs 6,030 crore in the previous year.

The trend is holding in 2007-08, with the revenue for the four months between April and July being Rs 2,851.02 crore representing a potential income of more than Rs 8,500 crore for the year.

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Ethanol-doped petrol supply plan hits roadblock again in TN
TN distillers face base liquor glut

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