THE high cost of molasses has forced Leyte Agri Corp. (LAC) to temporarily stop its production of bio-ethanol which is a suitable alternative to gasoline. LAC Chief Operations Officer Ruben Villanueva said planters prefer to convert their canes to sugar due to the comparatively higher buying price from sugar mills at P2,000 per 50 kgs. compared to LAC’s P1,600,
Aside from the high cost of molasses, a major raw material for ethanol production, competition from imported ethanol also forced LAC to stop its production. “The government has failed to impose 20% tariff on ethanol and the local industry has been affected by this situation. I appeal to the national government to regulate the importation of ethanol and use molasses price as price index,” he adds.
Villanueva also said they stand to lose P45-50 million annually if they continue with their bio-ethanol production. “Bio-fuel industry has some potential but not today; maybe in the future. Unless cane production and efficiency increase, we cannot compete with imported ethanol,” Villanueva explained.
LAC’s P35 million facility in Ipil, this city previously produced 10,000 liters per day, though it has the capacity to produce 15,000-20,000 liters per day. Villanueva clarified however that being a small manufacturer of bio-ethanol, LAC does not reflect the problems of the big players in the industry.
Two other ethanol plants, San Carlos Bioenergy Inc. in San Carlos and Roxol Bioenergy Corp. in La Carlota, both in Negros Occidental, have also stopped producing ethanol Both plants have the capacity to produce 30 million liter annually.
In the meantime that LAC has stopped its bio-ethanol production, the plant continues to produce ethyl alcohol for the denatured market. “We can still revive our bio-ethanol production if it becomes viable this year,” Villanueva said. “We just need adequate support from government.” He also said the Bio-fuels Law of 2006 should be fully implemented which calls for a mandatory mixing of 5% ethanol in gasoline in the first four years, to be increased to 10% thereafter. By Reyan L. Arinto
(West Leyte Weekly Express, Jan. 10-16, 2011)
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