India’s HPCL Eyes Bihar Sugar Mills for Captive Ethanol Production

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February 24, 2016

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by Ajoy K Das (ICIS News) India’s Hindustan Petroleum Corp Ltd (HPCL) is keen to venture into sugar production, making it the first among the country’s oil refiner-marketer to seek captive ethanol capacity through acquisition, a company official said on Friday.

The company has placed an initial bid of $9m for two of the eight closed sugar mills in India’s eastern province of Bihar, a provincial government official said.

The bid was a “trial case” for the oil refiner-marketer to acquire captive ethanol production capacity, the HPCL official said.

It was meant as a precursor to the government’s plan to hike the mandatory ethanol blending of petrol from 5% to 10%.

The prospective acquisition will assure HPCL of easier and more cost-effective sourcing of ethanol compared with public procurement from private mills, the company official said.

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Previous attempts to re-open the eight closed sugar mills in the province since 2005 had failed since most prospective investors were keen to use the sugar mills’ assets exclusively for the production of ethanol. Existing laws in India expressly prohibit such exclusivity, to promote sugar production. Consequently, previous bidders for the sugar mills have backed out. READ MORE and MORE (Times of India)

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