Ethanol Industry in India: Market, Forecast and Business Opportunities


 

 

The very interesting Ethanol is a by-product of the fermentation of sugars with the action of yeasts or via petrochemical methods including ethylene hydration. Ethanol finds great use in various segments of the industries and our lives as well. It's utilized in the production of pharmaceuticals, polymers, varnishes, polishes, plasticizers, and cosmetics. As a topical anti-infective, ethanol is also employed as a treatment for ethylene glycol or methanol overdoses in medicine. Thus, the product is widely used in different parts of the industries for serving multiple uses. Let’s see how it helps us and what significance it holds in the market and future India.

 

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Uses of Ethanol as Biofuel

As mentioned before, Ethanol has been rapidly making its space in all important industrial works, such as food industries, petrochemical industries, cosmetics, and many others. Besides, it is also helpful in following purposes, let's briefly know this.

·         It is an alcohol which blends easily with gasoline. It cuts down the emissions of carbon monoxide and increases the amount of octane. It also helps in cutting down the smog.

·         It is possible to lower crude oil imports by employing ethanol or biodiesel instead of petroleum-based gasoline and diesel fuel.

·         Denatured ethanol is used for cosmetics and is often seen in the ingredients list of the products.

There are endless uses that can be listed on and on, which has made the life of consumers simpler and easier.

 

Related Projects- Ethanol Manufacturing as Bio-Fuel | Ethanol Production from Rice/Rice Straw/Rice Husk/Rice Bran/Corn/Wheat/Maize | Dual Feed Distillery | Multi-Feed Distillery | Bioethanol production | Second-Generation Bioethanol Production | Lignocellulosic bioethanol production

 

Let's now discuss the market insights regarding Ethanol in India.

 

Market Insights 

With a capacity of 684 crore liters, India shows massive ethanol production. In the year 2021, the ethanol market demand hiked to about 3250 million liters. It is also anticipated that the market may amp up to 5412.06 million liters in the coming years, most probably 2030, with showing a CAGR rate of 8.25%.

It is expected to expand aggressively in the anticipated period by the year 2030. This growth will be seen in segments such as fuel additives, beverages, food, and many others. With the advent of National Biofuel Policy 2018, the Ethanol market has got an assurance of a blending target of 10% by the year 2022 and by the year 2030, it is expected to be 2030, rising from the present scenario of 2-3%. Thus, the ethanol market is ready to take a leap in the period of forecast from now on. Plus, the added advantage is the every now and then the addition of government support to this sector, which has propelled the growth high.

 

Related Books- Alcohol and Alcohol based Industries, Alcoholic and Non Alcoholic Beverages, Fruit Juices, Whisky, Beer, Rum, Wine and Sugarcane bye products

 

Investments Made by Government

The sugar mills have been focused prominently to make the sugar economy volatile and diversified, with a much-improved sugarcane value chain. The investments are as high as around Rs. 6000 crore have been invested for the upgrade for producing ethanol from sugarcane.

Not only this, the UP govt. has also invested Rs. 100 crore to upgrade cooperative sugar mills for the production of ethanol along with sugar.

After accounting for opening stocks of 10.2 million tonnes (MT) and project fresh output, India's total supply of sugar stands at 42.2 MT for the prevailing sugarcane crushing season. There would be an excess of 11.2 tonnes of sugar in the country based on the annual sugar intake of 26 metric tonnes and the 5 metric tonnes of exports.

 

Related Video- Lucrative Business of Dual Feed Distillery (Ethanol as Bio-Fuel)

 

There were nearly 200 applications from sugar mills for ethanol capacity, and the central government already had approved 114 of them, adding and almost 25% to the established ethanol capacity.

As of now, India's mission is to deliver an E10 blend by 2020, and an E20 blend by 2030. Imports of direct-produced ethanol from molasses, sugarcane juice, and damaged food grains are prioritized in the country's Ethanol Blending Program (EBP). Ethanol production is forecasted to increase in the years to come as a result of a surplus sugar season and financial rewards to transform added sugars into ethanol.

 

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             Raw Material

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            Equity Capital

            Preference Share Capital

 

  •    Annexure 1:: Cost of Project and Means of Finance

  •    Annexure 2::  Profitability and Net Cash Accruals

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                Total Cost of Sales

                Net Profit After Taxes

                Net Cash Accruals

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                Current Liabilities

                Net Working Capital

                Working Note for Calculation of Work-in-process

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  •    Annexure 5 :: Projected Balance Sheets

                ROI (Average of Fixed Assets)

                RONW (Average of Share Capital)

                ROI (Average of Total Assets)

  •    Annexure 6 :: Profitability ratios

                D.S.C.R

                Earnings Per Share (EPS)

               

             Debt Equity Ratio

        Annexure 7   :: Break-Even Analysis

                Variable Cost & Expenses

                Semi-Var./Semi-Fixed Exp.

                Profit Volume Ratio (PVR)

                Fixed Expenses / Cost 

                B.E.P

  •   Annexure 8 to 11:: Sensitivity Analysis-Price/Volume

            Resultant N.P.B.T

            Resultant D.S.C.R

   Resultant PV Ratio

   Resultant DER

  Resultant ROI

          Resultant BEP

  •    Annexure 12 :: Shareholding Pattern and Stake Status

        Equity Capital

        Preference Share Capital

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        Determined Capacity P.A of Products/Services

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        Net Usable Load/Capacity of Products/Services/Items   

       Expected Sales/ Revenue/ Income of Products/ Services/ Items   

  •    Annexure 14 :: Product wise domestic Sales Realisation

  •    Annexure 15 :: Total Raw Material Cost

  •    Annexure 16 :: Raw Material Cost per unit

  •    Annexure 17 :: Total Lab & ETP Chemical Cost

  •    Annexure 18  :: Consumables, Store etc.,

  •    Annexure 19  :: Packing Material Cost

  •    Annexure 20  :: Packing Material Cost Per Unit

  •    Annexure 21 :: Employees Expenses

  •    Annexure 22 :: Fuel Expenses

  •    Annexure 23 :: Power/Electricity Expenses

  •    Annexure 24 :: Royalty & Other Charges

  •    Annexure 25 :: Repairs & Maintenance Exp.

  •    Annexure 26 :: Other Mfg. Expenses

  •    Annexure 27 :: Administration Expenses

  •    Annexure 28 :: Selling Expenses

  •    Annexure 29 :: Depreciation Charges – as per Books (Total)

  •   Annexure 30   :: Depreciation Charges – as per Books (P & M)

  •   Annexure 31   :: Depreciation Charges - As per IT Act WDV (Total)

  •   Annexure 32   :: Depreciation Charges - As per IT Act WDV (P & M)

  •   Annexure 33   :: Interest and Repayment - Term Loans

  •   Annexure 34   :: Tax on Profits

  •   Annexure 35   ::Projected Pay-Back Period And IRR