Indonesian sugar firm gets into biofuel trade
Play
State-owned sugar and tobacco plantation firm PT Perkebunan Nusantara (PTPN) X is expanding into biofuel production and electricity this year in an effort to offset increasing sugar manufacturing costs.
The firm needs additional income from other businesses as it cannot wholly depend on its sugar division, according to PTPN corporate secretary M Cholidi.
“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,” he said in a telephone interview on Friday.
The Surabaya-based firm is currently developing a bioethanol facility at one of its sugar mills in Gempolkrep, Mojokerto, East Java province. To produce the biofuel, it will use molasses from its own sugarcane. Production capacity is expected to reach 100 kilolitres per day.
PTPN expects the facility’s commissioning period to begin in July and plans to have it fully operational in October. “Some of our international partners have committed to purchasing our biofuel. In Indonesia, we will also offer the product to Pertamina,” he said.
The facility needs up to 437 billion Indonesian rupiahs in investment. Some of the funds will come from PTPN’s internal cash, while the remainder will come from a grant from Japan’s New Energy and Industrial Technology Development Organisation (NEDO).
To minimise energy costs in bioethanol production, PTPN will process the bioethanol waste into biogas. The latter will then be used to power the bioethanol facility’s backup turbine and produce 4 megawatts (MW) of electricity.
Construction of the biogas facility will cost between Rp60 billion and Rp70 billion, and is scheduled for completion at the same time as that of the bioethanol facility. “This way we can reduce our energy costs, while minimising our bioethanol waste as well,” Cholidi added.
Besides bioethanol, PTPN is also working on developing cogeneration by using bagasse, or sugarcane residue, to produce electricity. It will spend up to Rp120 billion for the cogeneration development at its sugar mill in Krembung, Sidoarjo, East Java.
This facility will be able to generate 7MW of extra electricity, which PTPN plans to sell to state utility firm PT PLN. The firm also plans to establish cogeneration installation at its other mills in the future. Presently, PTPN operates 11 sugar mills in East Java.
