GRAIN BASED (MAIZE, WHEAT) ETHANOL PLANT
[CODE NO.4406]
Ethanol also termed as ethyl alcohol, grain alcohol, or simply liquid alcohol is abbreviated as EtOH; is an organic compound with molecular formula C2H5OH. Ethanol is a form of alcohol that is a renewable, domestically produced transportation fuelthat can be used to power automobiles like trucks, buses, boats, and motorbikes. Being apotent virucidal agent inactivating all of the lipophilic viruses, is utilized in manufacturing of drugs and cosmetics, plastics and plasticizers, lacquers and polishes.It can also fuel few farm equipment and tiny generators, being the best alternative fuel globally.Ethanol is the first generation biofuel.
Production of Ethanol from Grains ( WHEAT, MAIZE ) :
Ethanol production plants are considered biorefineries, because they convert grain biomass into biofuel using enzymes and living microorganisms.It is produced commercially by breaking down grains like maize, sorghum, barley and wheat.Ethanol derived from grains, can convert agricultural waste items into fuel. This fuel can be used in gasoline or diesel-powered vehicles. Due to lower capital cost, over 90 % of the grain ethanol produced today comes from the dry milling process, while the remaining coming from wet mills and solvent refining.Ethanol can also be produced from cellulosic feed stocks—such as grass, wood, and crop residues—which is a more involved process than using starch-based crops.
When ethanol is blended with 95% gasoline and other extravagant fuel additives, it can reduce about 90% CO2 and 60–80% SO2. This helps the world in solving many of the problems of air pollution, reducing the high levels of greenhouse gases that are causing drastic climate change while maintaining ecological security.
MARKET DYNAMICS:
The global ethanol market size was valued at USD 109 billion in 2022 and is anticipated to register an expansion at a compound annual growth rate (CAGR) of 4.8% from 2202 to 2032, to reach USD 170 billion. The demand for the product is driven by growing usage in the field of pharmaceuticals and antidotes and as a substance of a biofuel. Luxurious alcoholic beverages in every modern household is another major factor supporting market growth. To meet the market demand and supply, ethanol is manufactured by both natural as well as petrochemical feed stock.
The U.S. is the primary contributor in North America with a market share of over 18.6 %.However, Asia Pacific is estimated to register the fastest CAGR from 2020 to 2027 owing to growing fuel consumption, in pharmaceutical companies and increased industrial activities.Brazil in Latin America is second of the largest regional markets due to the abundant availability of raw material coupled with rising development in designing of compact and high efficiency motors from the automotive industry. It was one of the first countries that experimented by replacing the crude oil with the blending of ethanol into gasoline, representing 26.7 % of the total ethanol production globally in 2020. Consumption in luxury beverages, household disinfectant and in other FMCG products is at its peak and the trend is expected to continue for the next few years at a rate of 5 to 6%. These applications of ethanol are the major market drivers. The automotive industry has grown rapidly over the past years despite numerous troubles.
FUTURE OUTLOOK:
In terms of volume, the grain-based segment led the global market in 2020 with a share of 67.3%. Easy availability of food crops and development of efficient technologies day by day across the globe have boosted the segment growth significantly. Grain-based ethanol is majorly manufactured using the dry milling process where 1 bushel of maize can produce 2.86 gallons of denatured ethanol. World Corn production is expected to slow down by 4 % in 2022 -23 globally as manufacturers tackle problems associated with yields and saturation in demand.
India stands 6th among the leading ethanol producers in the world and still in 2020, it remained the biggest importers of the United States ethanol, with a market share of 99%. So far, in the country 196 grain- based projects with a combined capacity to annually produce 8.59 billion litres of ethanol per annum from food grains like rice and maize have been approved by the government since January 2021. Grain-based ethanol manufacturers have demanded that the Center follow dual pricing for the products made from maize and rice due to difference in realisation, potentially helping the government’s crop diversification plan.Oil marketing companies (OMCs) are offering to buy at ₹52.90/litre from grain-based ethanol plants,the government should offer to buy at ₹55/litre from those who are using maize as feed stock. Currently, India has 116 grain-based ethanol plants with an installed capacity of 268 crore litres, of which Punjab has the most –16 plants with a capacity of 61.67 crore litres. Till the end of 2020, there was no commercial cellulosic ethanol production in the U.S. Brazil—the world's second-largest consumer of fuel ethanol after U.S.—uses sugarcane to produce ethyl alcohol, which qualifies as an advanced biofuel for use in the country under the RFS. Argentina in 2020, was ranked 8th in the world with a contribution of just 1% toward the total global ethanol production. Colombia standing in 13th position in the world in 2020 with a contribution of 0.44% toward the total global ethanol production. And in the European Union in 2020,ethanol was 4.8% of the total global production.
COST ESTIMATION
Plant Capacity 120 KL/Day
Land & Building (1,20,000 sq.mt.) Rs. 59.98 Cr
Plant & Machinery Rs. 157.56 Cr
Working Capital for 2 Months Rs. 27.72 Cr
Total Capital Investment Rs. 260.26 Cr
Rate of Return 30%
Break Even Point 56%
APPENDIX – A:
01. PLANT ECONOMICS
02. LAND & BUILDING
03. PLANT AND MACHINERY
04. OTHER FIXED ASSESTS
05. FIXED CAPITAL
06. RAW MATERIAL
07. SALARY AND WAGES
08. UTILITIES AND OVERHEADS
09. TOTAL WORKING CAPITAL
10. TOTAL CAPITAL INVESTMENT
11. COST OF PRODUCTION
12. TURN OVER/ANNUM
13. BREAK EVEN POINT
14. RESOURCES FOR FINANCE
15. INSTALMENT PAYABLE IN 5 YEARS
16. DEPRECIATION CHART FOR 5 YEARS
17. PROFIT ANALYSIS FOR 5 YEARS
18. PROJECTED BALANCE SHEET FOR (5 YEARS)
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