Image Source: NewsDrum
Jagajit industries which is known for its products such as whisky, Indian Made Foreign Liquor (IMFL), beer and country liquor has made an announcement to set up a grain based ethanol manufacturing plant in Kapurthala, Punjab for a total cost of 210 crores. The decision which was made by the top officials of the company in July 2022 has received the environmental clearance and nod from the Ministry of Environment, Forest and Climate change.
The plant which is expected to manufacture 200 KLPD of ethanol is to be set up in 25 acres of area in Hamira village of Kapurthala. Out of the 210 crores required for the development of the plant 185 crores will be managed through bank loans and remaining amount via internal sources. Jagajit industries is a well known company established in 1944 and manufactures products such as malt, whisky, beer and other products on contract such as Boost for HUL
Roshini Shah Jaiswal, the promoter of Jagajit industries, said that the ‘green-field’ grain based ethanol manufacturing plant in Kapurthala will supply ethanol to Oil Marketing Companies (OMCs). She further added that the Ethanol blending plants are made very attractive by the government because of its goal to achieve 20% ethanol blending by 2025-26.
Once operational in 2024 i.e. a year after its gets approval of the government, Ethanol manufacturing will contribute to 20% of revenues of the company and later in 2025-26 it will contribute about 25% of the revenue said Jaiswal adding that ethanol blending in petrol can significantly reduce the crude oil imports bill of the nation.
Jagajit industries is a listed company in the Bombay Stock Exchange (BSE). With an annual revenue of 503 crores in 2021-22 it posted a profit of 0.48 crores. The company trades at a current stock price of Rs 104. The company has posted a YoY increase in its share price of close to 80%.
Ethanol Blending Program
The Ethanol Blending Program is designed by the government to reduce the dependence on crude oil imports, save foreign exchange and provide support to the sugarcane farmers. Ethanol is a by-product of sugar industries which can be blended with petrol and diesel and other fuels to reduce pollution and crude oil dependence. The government had set up a target of achieving an Ethanol Blending target of 10% till November 2022 which got completed in advance till June 2022.
So the government has now set the target to achieve 20% ethanol blending till 2025-26 which was earlier 2029-30. Minister of Petroleum Hardeep Singh Puri had said that the end goal is to produce Flex-Fuel vehicles which can run on both Ethanol and Petrol. This has been achieved in countries like Brazil.
To support the blending and making the industry more attractive, Ethanol prices were revised in December last year. The sugarcane juice Ethanol price was increased from 63.45 to 65.60 Rs. By the Cabinet committee on Economic affairs chaired by PM Narendra Modi.
Also the Rates of C- Heavy Molasses and B-Heavy Molasses were increased. This would help the Sugar industries in early payment to sugarcane farmers. The FRP for sugar is also increased by the government from time to time.
Currently 450 crores liters of Ethanol is produced in India and a total capacity of 1000 crores liters is needed for the near future. Tenders for another 400 crores liters have been issued by the respective ministry.
Ethanol is a clean fuel and also does not cause much pollution to the environment. Ethanol is also blended in diesel at 5% of the total. It is expected to be increased to 10% by 2025-26.
