The molasses generated in the Group’s sugar factories are used as raw material in its distilleries for production of Industrial Alcohol/Ethanol.
Molasses, meaning honey like, is a thick dark syrup that is a by-product of sugar refining through repeated crystallization of sugar syrup obtained by crushing sugar cane. Molasses is sold both for human consumption, to be used in baking and in the brewing of ale, as also for industrial use. In India Molasses is used mainly in manufacture of industrial/ potable alcohol, yeast and cattle feed. Alcohol in turn is used to produce ethanol, rectified spirit and various value added chemicals. Ethanol is consumed by chemical industry and is also used in blending with petroleum to produce Ethanol Blended Petroleum (EBP). The yield of molasses per ton of sugar cane crushed varies in the range of 4.5% and 5%. Molasses and industrial alcohol-based industries were decontrolled in 1993 and are now being controlled by respective state government policies. Nearly 90% of molasses produced is consumed by industrial alcohol manufacturers and remaining 10% for various other uses like potable liquor.
In India Ethanol, a type of industrial alcohol, is produced directly from Molasses. The Government offers subsidized loans to sugar mills for setting up an ethanol producing unit, covering 40% of the project cost thus encouraging higher Ethanol production. Since sugarcane production in India is cyclical, ethanol production also varies, thus not assuring the optimum supply levels needed to meet the demand at a given time. Lower sugar molasses availability and consequent higher molasses prices affect cost of production of ethanol, thereby disrupting ethanol supply for the blending programme at pre-negotiated fixed level. Increased consumption of Ethanol for these uses is expected to harden the prices of Ethanol and growth of this by-product of sugar in a healthy and profitable manner.