PLANS to enter into an ethanol-making joint venture will benefit the sugar industry, says the Sugar Cane Growers Council.
This comes as the Fiji Sugar Corporation and growers council announced they would engage the Sojitz Corporation of Japan as joint venture partner in the ethanol-making project following a competitive tender process.
Council chief executive Jai Gwander said there was a need to diversify into sugar bio-fuel and energy.
"Sugar will be there but there needs to be diversification into these areas," he said.
Mr Gwander did not wish to elaborate, saying the project was in its preliminary stages.
This week, Cabinet endorsed the corporation's proposal based on a submission by the Minister of Finance, National Planning, Sugar Industry and Public Utilities (Water and Energy), Mahendra Chaudhry.
Mr Chaudhry said the Fiji sugar industry had embarked on a reform program to ensure its long-term viability in light of its poor past performance, lack of investments in factories, rail and farm infrastructure and the reform of the EU sugar regime, leading to a significant decline in protocol sugar prices.
"As part of this reform program, the FSC is upgrading its mills and streamlining harvesting and transportation operations," he said.
"In addition, the corporation, among other diversification projects like cogeneration of electricity, is considering production of ethanol as part of the revival program with a view to enhancing the profitability and returns from otherwise marginal sugar manufacturing business."
Mr Chaudhry said ethanol production provided an ideal opportunity for the industry to add value to this otherwise, low value by-product.
He said the ethanol project was expected to produce 100,000 litres per day when fully operational, with production capacity to be 50 per cent only in the first year.
"The investment cost will be approximately $US23.9-million ($F36.5m), and annual revenue is projected to be $US13.2 ($F20.2m)."He said since ethanol could be produced from cane juice, "this is an alternative to sugar for the industry in view of its plan to increase sugarcane production".
Last year International Sugar Organisation executive director Dr Peter Baron had said sugar crops were the most efficient and economical feedstock for making ethanol, particularly when compared to grains and corn.
Dr Baron said the demand for ethanol outside its traditional homes of Brazil and the United States and elsewhere in the Americas, Asia and Africa was creating significant opportunities for developing countries with a sugar cane industry to pursue ethanol fuel.
He said the combination of ethanol diversification and improvement in bagasse co-generation raised the ability of the sugar industry to play a role in climate changes and the Kyoto Protocol requirements.
Dr Baron said the high oil prices were likely to continue to offer opportunities for bio fuels.
