THE BIOETHANOL arm of listed Alsons Consolidated Resources, Inc. of the Alcantara group is set to build a P2.5-billion, 100,000-liter-per-day plant in Cagayan de Oro.

“Assuming we get our ECC (environmental compliance certificate) this month, then production may start by 2012 as we’ll try within six months to start construction,” Mario Jose C. Baile, business development manager of the Northern Mindanao Biofuels Corp., told reporters.

The company has yet to determine the financing for the facility, but is considering to tap a credit line from the Development Bank of the Philippines and Land Bank of the Philippines provided by the government for such projects.

Mr. Baile said the bioethanol plant will use cassava as feedstock for the facility. All other existing plants in the country use sugarcane as feedstock for their plants. Mr. Baile said the company, being Mindanao-based, will use cassava as it is one of the major crops in the island. A 10,000- hectare cassava plantation will be needed for the plant.

The Ethanol Producers Association of the Philippines has recently filed a petition to the Tariff Commission to increase import duties to 20% from 1% to spur investments in the industry.

Mr. Baile said they are hoping for the approval of the petition so as to enable them to compete with cheaper ethanol imports from established countries.
“We are trying to compete with countries that have been producing ethanol for about 30 years, their economies of scale is far far larger than us,” Mr. Baile said. “The price of imported ethanol is very low.

We can’t compete with it. The offtakers like the oil companies do not want to contract our capacity because they can buy cheaper prices from abroad,” Mr. Baile added.

The country’s Biofuels Law mandated that all gasoline sold in the country have to be blended with 5% ethanol. By 2011, the minimum blend requirement will be increased to 10%.

The country’s two operational ethanol plants, San Carlos Bioenergy, Inc. and Leyte Agri Corp., have a combined capacity of 50 million liters per year.
Estimated current demand, however, stands 110 million liters, and is expected to leap by as much as 220 million liters in 2011.

Mr. Baile said industry estimate pegs possible investments from the ethanol industry to be at about P20 billion per year should the tariff increase be approved.

Aside from Roxol Bioenergy which is slated to contribute 27 million liters next year, there are at least three more companies namely Alto Power, Green Future Innovations, and Cavite Biofuels that committed to produce some 33 million liters, 54 million liters, and 37 million liters of ethanol, respectively.

The additional capacity of these four new plants will reach as much as 151 million liters of ethanol by 2011 bringing local supply to 201 million liters.

Alsons is engaged in energy and power business as well as property development and product distribution. Alsons has investments in two holding firms for its power business, namely Conal Holdings Corp. and Alsing Power Holdings, Inc. — Jose Bimbo F. Santos

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