Sugar Companies Push Ethanol Production

August 24, 2007

Nicaragua’s largest sugar companies announced plans this week to double the amount of ethanol they produce from sugarcane, hoping to cash in on alternative fuel that costs about $40 less per barrel than oil.

The manufacturers will upgrade their facilities to produce about 1 million liters of sugarcane based fuel a day, up from the nearly 500,000 liters that is produced now.

Mario Amador, who heads Nicaragua’s main sugar consortium, told reporters Aug. 14 that the increased ethanol production will go into effect by 2008 or 2009. Amador said that the alternative fuel will be exported to  Brazil, Argentina and other countries that utilize the sugarcane ethanol to help power cars and homes.

Most of Nicaragua’s energy plants run on oil and there are no specialized gas stations here so far that pump out plant-based fuels.

Sugarcane exports earned nearly $57 million in the first six months of 2007, up from $34.5 million over the same period last year, according to government statistics.

The interest in increasing ethanol production here follows an Aug. 8 visit by Brazilian President Luiz Inácio Lula da Silva, who champions sugarcane ethanol as a cheap alternative to oil. President Daniel Ortega has been critical of corn-based ethanol and did not accept any immediate Brazilian help to improve the two plants that already produce the sugarcane fuel (NT, Aug. 17).

Grupo Pellas and three other private companies here will finance two new production facilities, estimated to cost $30 million.

Carlos Pellas, whose company holdings include both Flor de Caña rum, said that he is in “complete agreement” with President Ortega on not using corn for ethanol.

Pellas called sugarcane ethanol, which is grown largely in the northern part of Nicaragua, a safe and cheap fuel option that will not harm food crops.

“The cost of ethanol is about $40 per barrel,” Pellas said. “It is a great solution to replace our dependency on oil.”

 

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