State-owned Perkebunan Nusantara X, the country’s largest sugar producer, forecasts that the sale of bioethanol will generated an additional Rp 300 billion ($31 million) in revenue each year.
PTPN X, as the company is called, said on Wednesday that it is in talks with state-owned energy firm Pertamina, which could lead to the fuel being sold by the end of this year.
The sugar producer is completing the construction of a Rp 461.2 billion bioethanol plant spread over 6.5 hectares of land in Gempolkrep, which is around 30 kilometers west of Surabaya.
The plant will use vinasse — a liquid by-product of sugar production — to make 30,000 kiloliters of bioethanol per year. It is expected to begin production in October.
Japan’s New Energy and Industrial Technology Development Organization (NEDO) provided Rp 150 billion in grants for the development of the plant, while the remainder was funded by PTPN X.
Mochamad Sulton, director of marketing, planing and development at PTPN X, confirmed its intention was to cooperate with Pertamina in selling bioethanol.
“The plan is that Pertamina will use our bioethanol as a mixing ingredient for its fuel,” Sulton said.
Toto Nugroho, Pertamina’s manager of new and renewable energy business development, said Pertamina welcomed the possibility of cooperation with PTPN X.
Pertamina, he said, was considering buying outright the bioethanol or establishing a joint venture to develop the business with PTPN X.
In addition, PTPN X is examining ways of deriving revenue from bagasse — the fibrous by-product of pressing sugar. The company estimated that its sugar plant can churn out enough bagasse to generate up to 4 megawatts of power.
“We are seeking revenue sources from the non-sugar business to bolster our finances,” Sulton said.
PTPN X, one of the country’s few national planation companies, is eyeing an 8.9 percent rise in sugar production this year to 538,000 tons. Indonesia, though, needs to import sugar to meed domestic demand.