Sea Oil is eyeing a joint venture with sugarcane planters to set up a three-legged factory somewhere in Murcia and Bago that will produce sugar, ethanol and electric power, Enrique Rojas, president of the National Federation of Sugarcane Planters, said yesterday.
Rojas, with United Sugar Producers Federation of the Philippines president Manuel Lamata, Mike Hinojales and sugar mill fabricator/consultant Mike Smith, met with Sea Oil president and CEO Francis Glenn Yu and his son Sea Oil COO Stephen Yu at the Sea Oil main office in Manila on February 19.
“We are doing this for our sugarcane planters,” Rojas said. “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 they are eyeing a sugar mill with a capacity of 8,000 to 10,000 ton canes per day, an ethanol plant between 140,000 to 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 also 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,” Lamata said adding that, instead of burning their trash, farmers can gather and bale it and sell it to the factory for added income.
Lamata also said that Sea Oil is not interested in the cane purchase scheme, considering that cane purchase is opposed by sugarcane farmers.
“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,” Lamata said.
Since the factory will be far from other mills, Lamata said they will not be affecting the cane supply of those mills. On the other hand, they 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, he added.*AFP