Sugar mill, ethanol, electric power eyed

SEAOIL Philippines Inc. is eyeing a joint venture with sugarcane planters to set up a three-legged factory somewhere in Murcia and Bago, where it can produce sugar, ethanol and electric power.

Enrique D. Rojas, president of the National Federation of Sugarcane Planters who, together with UNIFED president Manolet Lamata, Mike Hinojales and sugar mill fabricator/consultant Mike Smith, met on Monday with SeaOil executives Francis Glenn Yu and his son Stephen Yu at the SeaOil main office in Manila last February 19 to ensure sustainability of the sugarcane industry.

"This move is geared towards ensuring the sustainability of the sugarcane industry when tariff on imported sugar is slashed down to only 5 percent by 2015 and our domestic sugar will face stiff competition from cheaper subsidized imported sugar," Lamata said.

Lamata explained that they are eyeing a sugar mill with a capacity from 8,000 to 10,000 ton canes per day, an ethanol plant between 140,000 and 200,000 liters per day and a steam-powered generating plant which can contribute 10 mega watts to 15 mega watts to the grid.

"The best thing about this venture is that Sea Oil will purchase all the ethanol produced by the plant from molasses and syrup," Lamata said.

Pricing for ethanol will follow the index designed by the Sugar Regulatory Administration and the Department of Energy under a mechanism which integrates prevailing oil prices in the computation.

"We will continue working for favorable sugar prices, but the added income from ethanol which has a sure market created by the Biofuels Act and from power generation which our province sorely needs will surely boost the income of our sugarcane farmers," Rojas said.

During off season when the supply of bagasse dwindles, the factory will use firewood, cane trash which is traditionally burned, and other bio-waste materials as alternative feedstock.

"We will initiate commercial tree farming in coordination with nearby LGUs and we will also procure baling equipment for cane trash," said Lamata, citing that, instead of burning their trash, farmers can gather and bale the trash and sell them to the factory for added income.

Lamata reiterated that "the project will be more of a partnership with the planters. Our planters will be assured of an equitable sharing not only in sugar production but also in ethanol and power generation."

"Moreover, all the equipment will be brand-new, thereby assuring the planters of more efficient systems and higher recovery for their sugarcane," Lamata added.

Groundbreaking to fire-up will take approximately two years for the three-legged factory.

"Since the factory will be far from other mills, we won't be affecting the cane supply of those mills. On the other hand, we are offering an alternative factory for sugarcane farmers in the Murcia, Bago and Ma-ao mill districts so that they can lessen their transport costs when they bring their canes to a nearby mill," Lamata said.

Government will also benefit from the decongestion of highways with the lesser volume of cane trucks traveling to mills in the northern part of the province, he added.

SeaOil executives will be coming to Bacolod next week to finalize the talks, Lamata disclosed.