URC bags fuel ethanol supply deal with Flying V

By: Doris C. Dumlao - 10 years ago

MANILA, Philippines–The Gokongwei-led Universal Robina Corp. has bagged its first fuel ethanol supply deal with Flying V, one of the leading fuel distributors to emerge after the oil deregulation.

The production of fuel ethanol using sugarcane, in turn stabilizing demand for sugarcane production and creating higher valued product, is URC’s way of preparing its commodities business for the decline in tariffs once the Southeast Asian block integrates into a single economy starting 2015.

In a disclosure to the Philippine Stock Exchange on Monday, URC said this deal supported the government’s push for renewable energy as well as a sustainable sugar industry.

Under an agreement signed on Dec. 8, URC will supply Flying V with fuel-grade anhydrous ethanol suitable for gasoline blending.

SCREENGRAB from www2.urc.com.ph

Flying V has become the Philippines’ largest fuel company–after the Big 3 of Petron, Pilipinas Shell and Chevron since the oil industry deregulation–with over 350 stations nationwide, the statement noted.

Blending gasoline with at least 10 percent fuel ethanol is in line with the Department of Energy’s bioethanol program.

“URC fully supports the government’s renewable energy program,” said Rene Cabati, general manager of URC’s sugar business unit.

Cabati said the fuel ethanol supply agreement between URC and Flying V also reinforced the Sugar Regulatory Administration’s drive for a sustainable sugar industry through diversification.

“It doesn’t have to be only sugar that we can produce from sugar cane. We can produce fuel ethanol,” said Cabati. “This diversification into a higher-value product from a widely available crop in the Philippines will prepare the local sugar industry for Asean (Association of Southeast Asian Nation) integration.”

Tariff on imported sugar across will fall to 5 percent when Asean’s economies are integrated into an “Economic Community” in 2015.

URC will supply Flying V from its newly inaugurated fuel ethanol plant in Barangay Tamisu, Bais City, in Negros Oriental. The facility has a rated production capacity of 100,000 liters per day of fuel-grade ethanol using sugar molasses generated from three sugar mills in Negros. It is also the first in Southeast Asia to use the “spent wash incineration boiler” that is touted to be “environmentally safe and hazards-free.”

The fuel ethanol plant is one of two projects URC had undertaken to support the government’s renewable energy program and its search for alternative uses for sugarcane. The company is also commissioning a 46-megawatt bio-mass cogeneration power plant in Negros Occidental.

“Both projects guarantee that sugarcane planters will have a ‘home’ for their canes, and sugar farm and sugar mill workers will continue to have jobs, even as we face competition from sugar producers abroad,” said Cabati.