HPCL buys 2 sugar mills, eyes ethanol, power | business | Hindustan Times
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HPCL buys 2 sugar mills, eyes ethanol, power

business Updated: Mar 06, 2009 23:25 IST
Anupama Airy
Anupama Airy
Hindustan Times
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The country’s second-largest state-owned oil refining and marketing company, Hindustan Petroleum Corp Ltd (HPCL), is diversifying into sugar production. An investment of Rs 600 crore has been lined up by the company to re-start the two sugar bills it acquired in Bihar.

Apart from sugar, the mills will produce ethanol and generate around 100 mega watts (MW) of power using bagasse in activities in line with its focus on energy issues. Ethanol is emerging as an additive in fuels.

HPCL informed its board on Thursday that the process of taking over the assets of the Sugauli and Lauriya mills with distilleries for Rs. 95 crore commenced from February 25. The two units belonged to Bihar State Sugar Corp are more than 75 years old and have been lying closed since 1996.

The company has prepared a detailed feasibility report (DFR) to build two sugar mills in place of the ones reduced to junk. The new mills have a crushing capacity of 3,500 tonnes per day (TCPD) each at these sites. Associated with each of these two sugar mills would be a 30 MW cogeneration power plant and a 60 kilolitre-per-day ethanol distillery unit.

Confirming the move, S Roy Choudhary, director (marketing), HPCL, told Hindustan Times that ethanol produced from these units will be used for fuel mixing under the government’s ethanol blended auto fuel programme while sugar produced at the units would be sold to the state trading agencies.

While the DFR for the two sugar units has been prepared by MITCON Consultancy Services Ltd, the financial appraisal of the project is currently being carried out by IDBI Capital Services.