Gulf Petrochem investing Rs1,000-cr in ethanol unit in India: report

GD Goenka group company Gulf Petrochem is planning to invest Rs1,000 crore in an ethanol manufacturing plant in India, as it seeks to leverage the government's policy that allows blending ethanol with petrol, The Economic Times reported quoting company sources.

The UAE-headquartered entity sees big scope for an ethanol plant in India considering the huge gap in demand and availability. Against the government's mandate for blending 5 per cent ethanol with petrol, oil marketing companies hardly manage 2 per cent blending of ethanol.

With current ethanol production of around 800 million litres, there is a gap of 1200 million litres between supply and demand.

In fact, a decade-old government decision to reduce dependence on fossil fuel and increase the use of renewables and to reduce vehicular emissions has now been made mandatory. But a shortage of ethanol has made its implementation difficult and the country is managing at most with 2 per cent blending.

Ethanol manufacturers, mostly sugar mills who use molasses as raw material, say state levies and the centrally-fixed price of Rs48.50 a litre are deterrents to capacity expansion.

"We want to grow in India. Besides our oil business, we have diversified into steel. Now we want to get into ethanol manufacturing," the report quoted Manan Goel, Gulf Petrochem's group director as saying. "States have been inviting investments so we are looking for a site where we can get the land closer to the raw material availability."

The business was started in the early 90's, when brothers Ashok Goel and Sudhir Goyel began with trading of petrochemical products in Delhi and Gujarat in India. In 1998, they expanded the business activities to Sharjah, United Arab Emirates and named the company Gulf Petrochem.

Within a few years of the commissioning of a refinery, it has established itself into 6 strategic business unit, viz, oil trading and bunkering, oil refining, grease manufacturing, oil storage terminals, bitumen manufacturing and shipping and logistics.

Gulf Petrochem Group is now a well integrated business, with all units supporting each other.