Two ethanol-producing firms are optimistic of dealing with constraints caused by the scarcity of molasses through the $100 million (K73 billion) Raw Materials (Rama) project.
The dual-listed Press Corporation Limited (PCL) subsidiaries—Chikwawa-based Presscane Limited and Ethanol Company Limited (EthCo) based in Nkhotakota—buy molasses from listed Illovo Sugar (Malawi) plc and ferment it into ethanol which, among other things, is blended with petrol by petroleum companies.
For the past 15 years, the main raw material for ethanol, molasses, has been in short supply, constrainting Presscane, which has been importing molasses from Mozambique since 2014.
In an interview on Tuesday, Presscane general manager Chris Guta said the situation is affecting their profitability as they are not using their plant to full capacity.
“The shortage of molasses in the country means we cannot operate our plant at 100 percent; hence, we are not making as much money as we should, and therefore, we pay less taxes to the government and limit employment,” he said.
But PCL Group project manager Lyton Chithambo in an interview on Tuesday was optimistic of the K73 billion Rama project which has been delayed due to technical problems.
PCL plans to put two plants estimated to cost $22 million (K16 billion), one in Nkhotakota and the other in Chikwawa, to process sugarcane into syrup which is used in sugar production to supplement the scarce molasses.
Already, PCL has identified an export market for the extra syrup and has linked up with an Indian company Uttam Energy which has an international market for syrup.
“We have been facing challenges to get molasses which is a waste product in sugar production, especially during the lean period; hence, we have changed the model of the Rama project. We now want to crush sugarcane ourselves so that we can get syrup which is used in sugar production.
“It is an expensive option that will increase our production costs but we have to do it as it is the only viable option. In turn, we will try to recover the cost as well as generate foreign exchange for the country through exports,” said Chithambo.
Syrup is a stage away from sugar, but PCL says in their current strategy they have no interest in producing sugar.
Presscane has the capacity to produce 36 million litres of ethanol per year, but only produces between 20 and 25 million litres.
Out of the quantity, 16 million litres are used to blend with petrol, largely due to lack of raw materials.
EthCo produces nine million litres of ethanol and with the Rama project, the plan is to produce 18 million litres per year. n