SUGAR AND REAL ESTATE HOLDING firm Roxas & Co. Inc. will start commercial operations of a P1.6-billion bioethanol manufacturing plant in La Carlota, Bacolod, this February.

The company is optimistic that the undertaking will be helped along by a government measure that will slap a 20-percent tariff on imported biofuel as an incentive to local producers.

RCI will also invest about P1 billion over the next two to three years in new residential, hotel and resort, commercial and mixed-use ventures.

While sugar will still account for bulk of its business, the company also wants to increase revenue of its real estate unit, Roxaco Land Corp., to around 30 percent of total in five year’s time from less than 10 percent at present.

The new plant will produce 100,000 liters of ethanol fuel per day and is designed to manufacture other downstream products. It is being built for RCI’s Roxas Bioenergy Corp. by KBK Chem-Engineering, an India-based firm.

The new plant is expected to produce 30 million liters a day based on a 10-month operating cycle, RCI president Ramon Picornell Jr. said during a briefing. The bioethanol plant will be the third such facility in the Philippines.

“There is a market for 450 to 500 million liters a year for E10 (biofuel),” Picornell said, adding that under the biofuels law, oil companies were mandated to make use of local supply before they could import.

RCI has also teamed up with other bioethanol producers to support efforts to jack up the tariff rate on biofuels to 20 percent from only 1 percent at present.

The rationale behind the low tariff at present, Roxas said, was because there was not enough domestic production to cover demand.

“But when there is domestic production in the pipeline, tariffs will be increased to allow the industry to scale up and be more efficient,” he said.

He noted that the tariff increase wasn’t an unreasonable request given that the world’s biggest ethanol producer Brazil itself had an existing 30-percent tariff on the product.

Thailand also has a 20-percent tariff, he added.

RCI treasurer Asuncion Aguilar said the company had committed to the World Bank that, for every ton of carbon that it would get credit for under the global credit trading framework, it would plow a dollar back into the community.

A large budget for waste management, as well as port and storage facilities, accounted for portions of the P1.6-billion used to put up the bioethanol plant, Picornell explained.