A.P. firms gearing for bio-fuel projects

By P. Vikram Reddy

HYDERABAD, June 26. The enormous potential that alternate fuel like bio diesel has, is beginning to attract enterprising entrepreneurs willing to venture into a Greenfield area. At least a dozen entrepreneurs in various parts of the country are planning or working out their strategies to either set up bio diesel production units, or start from the plantation level to evolve into integrated projects over the next few years.

Bio fuels generate interest because of lesser environment, pollution, foreign currency saving and potential to improve rural economy. With the nation's transport sector consuming about 50 billion litres of diesel, emission of pollutants has always been a big concern.

Brazil is using up to 24 per cent ethanol-gasoline blends, while the U.S., Canada, and Sweden use 10 per cent blends. Germany offers B20 (blend of 20 per cent bio fuel) and B100 options. Australia and Italy are following suit. Half a dozen producers in the U.S. have 10,000 tones of capacity.

Awareness in India is only now giving shape to projects. In Andhra Pradesh four companies are seriously into it --- Southern Online Bio Technologies (SBT), Tree Oils Ltrs (Zaheerabad), Naturol BioEnergy, and the GMR group.

Others include Vridheshwar SSK Ltd (Ahmednagar, Maharastra), The Simbhioly Sugar Mills (Ghaziabad, Uttar Pradesh), Mewar Sugar Mills (Jaipur), SM Dyechem (Thane, Maharastra), R.S. Petrochemicals (Punjab) and Progressive Petroleum (Mumbai). The Aditya Birla Group proposed a project in Malaysia, which did not come off.

They feel that the Government should offer incentives to offset risks of a Greenfield area. N. Satish Kumar, Managing Director of SBT which is setting up Rs. 15 crores 30 tpd (second phase to 100 tpd), favours sales tax exemptions, income tax holidays and duty free import of non-edible oils (till indigenous raw material is available). They argue that once the industry takes firm roots, the farmers would automatically benefit. C.S. Bhaskar, Managing Director of Nuturol, is waiting for the State and Central Government's bio-fuel policies and incentives to achieve financial closure of their 300 tonnes per day Rs. 135 crore plant proposed at Kakinada.

It is joint venture of FeClean Energy Inc. (U.S.) and Energea Gmbh, Austria. They plan to promote Pongamia / Jatropha cultivation in 1.20 lakh acres, and import raw material (oils) till farmers get yield.