Ethanol Company Limited’s Expansion Project

Project description

Ethanol Company Limited (EthCo) intends to invest in greenfield cane farming and syrup mill projects to enable sugarcane syrup production for use as raw material to supplement existing molasses supplies and later on as feedstock for a new ethanol distillery. The existing distillery has a capacity to produce 18 million litres of ethanol per annum, but is currently operating at 65% capacity due to feedstock (molasses) inadequacy, thereby negatively affecting the company’s capacity utilization, strategic growth and its capacity to meet demand on both the food grade and fuel ethanol markets. The proposed site for this project is Salima District.

The first phase of the project will be developing an anchor farm of 1,000 hectares to grow sugarcane and installation of a syrup mill for additional feedstock to fully utilise the capacity of the distillery in Dwangwa. This is planned to be done between 2024 and 2027. The second phase shall be installation of a fuel ethanol distillery and developing an additional 3,000 hectares of sugarcane farms from 2027 to 2029.

The business is multisectoral, directly impacting the agriculture, manufacturing (value addition for agriculture produce), food and beverages and energy industry sectors.

The project is unique and multifaceted within the industry ecosystem such that it gives the business an advantage on cost leadership following the control of critical areas within the value chain i.e. growing own sugarcane, experience in manufacturing for both distillery and syrup mill, production of electricity as a source of energy using biomass. In addition, there is a growing demand for ethanol, both in fuel and food grade form, hence availability of market for the product.

The expansion of the company’s operations will be achieved by:

• Acquiring land and cultivating Sugarcane on a Megafarm of 4,000 hectares
• Investing in a sugar milling factory that will produce 88,000 tons syrup. This syrup would be used as supplementary feedstock to fill the existing distillery as well as feedstock for a new distillery which will also be installed at the green field site.
• Investing in a boiler and turbine to produce 6 Megawatts of renewable electricity from bagasse, the sugarcane fibre. Of this electricity, 60% will be used for EthCo’s facilities and the balance would be available for the grid
• Investing in a 120,000 litres per day fuel ethanol distillery to contribute to the Government of Malawi’s import substitution agenda as well as the Nationally Determined Contributions for global Climate Change mitigation.
• A Zero Liquid discharge effluent treatment facility that will produce 2MW electricity via an incineration boiler for the grid.

Financial requirements

Total project costs are estimated at EUR55.5 million (US$60 million)

The proposed investment model shall be firmed up after conducting a comprehensive financial feasibility study.

Project feasibility

A preliminary technical feasibility study shall be done to assess the suitability of any identified land for sugarcane growing. A comprehensive feasibility study and environmental impact assessment shall be done once the land is acquired.

The ethanol market in Malawi has huge potential for growth; the current demand for fuel for ethanol is yet to be met, other uses of ethanol e.g for cooking and as a fuel for power present further opportunities for market demand.

Contact

The Chief Executive Officer

P.O. Box 50

Dwangwa

MALAWI

Mr. Wasili Asi, General Manager, Press Properties Limited

• wmfungwe@presscorp.com

• ethco@ethanolmw.com