An umbrella organization of distillers and bioethanol producers asked the government to allow the importation of molasses as feedstock to enable the industry to meet the annual demand of 500 million liters of bioethanol.
Center for Alcohol Research and Development chairman and Absolut Distillers Inc. chief operating officer Gerardo Tee said the importation, if allowed, would only be temporary while the industry was trying to improve its agricultural production.
Tee said the government’s support, such as allowing the importation of molasses, would help ensure the continued growth of the P30-billion bioethanol industry.
“The more efficient the farms will be, the more molasses we will have and the more sugarcane. And importing ethanol is not a good idea. [It is] better to import molasses because it will convert to manufacturing and more labor,” Tee said.
The industry needs the approval of the Sugar Regulatory Administration, which is under the Department of Agriculture, for the molasses importation.
The bioethanol industry supplies only about 60 percent of local demand because of feedstock constraint.
“The limitation is more on the feedstock rather on capacity. We have more than enough capacity. It’s an evolution of the law. The law does not allow us to import the feedstock, so that’s the main bottleneck of growth. There is not enough feedstock,” said George Cheung, Card director and senior vice president of Roxas Holdings Inc.
Cheung said the government should allow the importation of molasses as it would improve the capacity utilization of the local industry while creating additional employment. He said this is better than the government allowing the continued importation of finished products or bioethanol.
“Right now, we have about 300 million of capacity, yet we only have enough in the country for 250 million for feedstock. We need to go up to 500 million in capacity. We don’t have the feedstock to reach 500 million,” Cheung said.
Molasses importation will also help stabilize ethanol prices, Cheung said.
Officials said the industry would require around 700,000 metric tons of imported molasses on a phased basis. Major molasses producers are Thailand, India, Pakistan and Indonesia.
Card vice chairman Ferdinand Massi assured that they would resort to importation only when the local molasses supply was exhausted to protect the farmers.
“What we are saying is we will import molasses that is lacking in our capacity. We buy local first, before importing molasses,” Massi said.
Among the members of Card are ProGreen, Balayan Distillery, Roxas Holdings, Absolut Distillers, Victorias Milling Inc.
