Indonesian sugar company to diversify into bioethanol and biogas

State-owned plantation company PT Perkebunan Nusantara (PTPN) is set to widen its product portfolio by expanding into biofuel production during 2013.

It has been reported that its sugar and tobacco lines cannot be fully relied on to support the Indonesia-based company, which is seeing increased manufacturing costs, so biofuels and electricity production are set to be introduced.

‘Sugar manufacturing costs continue to increase, in line with the rise in sugarcane prices. On the other hand, we cannot increase sugar prices that easily. So one way to solve the problem is by diversifying our business,’ PTPN corporate secretary Moch Cholidid was quoted as saying.

A bioethanol facility is being developed at one of its sugar mills in East Java and is expected to use molasses as feedstock.

The resultant waste will be converted into biogas that is hoped to produce around 4MW of electricity. The biogas plant is expected to cost around IDR60 billion (€4.6 million).