Gokongwei-led Universal Robina Corp. has bagged its first fuel ethanol supply deal with Flying V, a leading independent fuel distributor.
The production of fuel ethanol using sugarcane is expected to help stabilize demand for the commodity and create higher value product. It is URC’s way of preparing its commodities business for the decline in tariffs once Southeast Asian countries integrate 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 and 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.
Flying V is the Philippines’ largest independent fuel company, with more than 350 stations nationwide, according to a company statement.
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 the 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” next year.
URC will supply Flying V with the production 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 hazard-free.” Doris C. Dumlao