VSIL planning to ramp up ethanol capacity to 500,000 liters per day
Chemical

VSIL planning to ramp up ethanol capacity to 500,000 liters per day

The company is looking at both brownfield and greenfield expansion in Belgavi and expects completion by November 2023 and FY2024 respectively

  • By ICN Bureau | January 18, 2022

Vishwaraj Sugar Industries Limited (VSIL), an integrated sugar and ethanol manufacturer, is planning to ramp up the capacity for ethanol taking total capacity to 500,000 liters per day.

Additionally, the company plans brownfield ethanol production expansion by capacity of 150,000 liters per day. This expansion is driven by technological upgradation and the company is filing a patent to that effect. This will increase the overall ethanol production capacity to 250,000 liters per day. The expansion will happen in the existing premises by November 2023.

Further, the company is planning to set up a greenfield ethanol production facility, having a final capacity of 250,000 liters per day, within 80 kms from the existing factory in the Belagavi district. The company has already acquired 120 acres of land for this project. The estimated project investment is Rs. 250 crore and the first full year of operation of this facility shall be FY 2024.

The company is planning to move up the value chain by targeting new clientele in the pharmaceuticals, health supplements & nutraceuticals. Razor-sharp focus on high-value high-margin products, such as pharma grade sugar and ethanol, is expected to increase the revenue per ton of sugarcane crushed over the next five years.

Going forward, VSIL plans to move up the value chain by targeting new geographies, sectors, and clientele in the pharmaceuticals. health supplements and nutraceuticals, and beauty and personal care industries. These markets belong to the niche category and are characterized by enhanced price realization and improved receivables management.

In the normal course, price realization per liter of ethanol stands at Rs. 62.7 for the ethanol produced from sugarcane syrup, and Rs. 59 for the ethanol produced from molasses. In the case of pharma-grade ethanol, the price realization goes up to Rs. 67 per liter. Thus, going forward, the company will prioritize selling a mix of pharma grade sugar, pharma grade ethanol, and vinegar.

The company has entered into contracts with Oil Marketing Companies for supplying 25 million liters of ethanol commencing from December 2021, as against the supply of 22.5 million liters of ethanol during the twelve-month period ended on November 30, 2021. The company has already supplied 4.75 million liters of ethanol for the current period.

Integrated sugar and ethanol manufacturer, VSIL has a sugarcane crushing capacity of 11,000 MT per day, distillery capacity of 100,000 liters per day, co-generation capacity of 36.4 MW, and vinegar manufacturing capacity of 70,000 liters per day. The process of reengineering implemented by the company leads to a bacteria-and-pathogen-free superior grade sugar and ethanol. While the acceptance level for pure alcohol/ethanol is 99.6%, the company has already achieved and delivered 99.9%, benchmarking the best international standards.

Meanwhile, for the third quarter ended December 2021, Vishwaraj Sugar has posted a 61.06 per cent rise in total revenue at Rs. 133.28 crore compared to Rs. 82.75 crore in the corresponding quarter ended December 2020. While Net Profit stood at Rs. 29.44 crore for the quarter ended December 2021 compared to Rs. 30.46 crore in the corresponding period the previous year due to higher tax payments in the quarter.

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