Negros bioethanol plant now fully operational

MANILA, Philippines—The P1.6-billion bioethanol unit of publicly listed sugar group Roxas Holdings Inc. in Negros Occidental is now in full swing on the eve of the government’s issuance of much-awaited guidelines for ethanol pricing.

RHI’s Roxol Bioenergy Corp. (Roxol), a new plant which started production in July, has a capacity to produce 30 million liters of ethanol a year based on a 10-month operating cycle. It uses molasses, a byproduct of sugar production, as feedstock.

“We may begin to see an income stream from this platform in the coming months,” RHI chair Pedro Roxas said in a press statement on Wednesday. “This is why it is important to have the economies of scale. RHI has been investing in this platform over the last couple of years to reach that scale and allow us to move to the next level.”

Roxol has started negotiations with several oil companies to supply their fuel ethanol requirements. Under the Biofuels Act of 2006, oil firms are required to blend 10 percent of ethanol with their gasoline.

The Roxas group, which earlier considered recalibrating the new plant for potable ethanol production catering to the beverage industry, is now upbeat about operating the plant for fuel production because of favorable developments regarding the Biofuels Law from the government’s implementing rules on local end-pricing.

“We were informed that the guidelines shall involve a reference price for locally produced fuel ethanol based on the National Biofuel Board’s published prices of feedstock as monitored by the Sugar Regulatory Administration,” Roxas said.

“Obviously, the ethanol space is a startup industry and it will go through birth pains. But with this encouraging development, we are happy that Roxol can now start moving full steam ahead,” Roxas added.

The local guideline covers the respective reference prices of local and imported ethanol and is separate from the tariff issue.  Local bioethanol producers have been requesting the government to slap a 20-percent tariff on imported biofuel as an incentive to local producers.

Conscious of the scheduled reduction in sugar prices under the Asean Free Trade Area-Common Effective Preferential Treatment (Afta-CEPT) as well as the volatility in global commodity prices, the Roxas group would like to diversify from being just a commodity group by producing higher value added products.