January 10, 2007
Foreign groups eyeing the Philippines for ethanol plants
Foreign investors are keen on establishing ethanol plants in the Philippines using sweet sorghum as a feedstock, an industry official said Tuesday.
Potential ethanol investments from the four groups could reach up to US$160 million, William Dar, director general of the International Crops Research Institute for the Semi-Arid Tropics, or Icrisat, told reporters.
These investors, two of whom are from South Korea and Australia, are interested in building ethanol facilities in northern Luzon, Dar said.
The interest follows the Philippine Congress' approval late last year of the National Biofuels Act, mandating the use of an ethanol blend in gasoline. Under the law, oil companies will be required within two years from its effectivity to sell gasoline blended with 5percent ethanol, increasing to a 10percent blend in the fourth year of the law's effectivity.
According to Dar, constructing a sweet sorghum-based ethanol facility could require an investment of around US$8 million at a capacity rate of 40,000 litres a day.
The investors, however, are interested in establishing ethanol facilities of a larger capacity, such as those reaching 200,000 litres per day. A 200,000- litre per day ethanol plant requires 30,000 hectares of sweet sorghum, he said.
This means investment for one facility could reach up to US$20 million, he said.
Dar said these investors have been closely coordinating with Icrisat, which will be providing the planting material in establishing sweet sorghum plantations in the country.
Dar added five varieties of sweet sorghum have already been tested in the Philippines, and adaptability of two of these varieties has already been proven under local conditions.
Sweet sorghum is one of many varieties of sorghum, a cane-like plant with high sugar content. Sweet sorghum will thrive under drier and warmer conditions than many other crops.
These investors have taken interest in using sweet sorghum as a feedstock for ethanol as it's more commercially viable compared with sugar cane, corn or cassava, he said.
Dar said compared to sugar cane or corn, sweet sorghum can be harvested on a within four months which can enable farmers to have three cropping seasons in a year.