Lanna unit upgrades factory

       Thai Agro Energy Co, a subsidiary of the SET-listed coal miner Lanna Resources Plc, is investing 1.7 billion baht in its second ethanol factory and to upgrade an existing plant to be able to shift between two raw materials, said executive director Srihasak Arirachakaran.
       The 1.5-billion-baht second factory will have daily output of 150,000 litres and is expected to start operating in early 2011. Another 200 million baht will be used to upgrade machinery to accommodate either molasses or cassava at the existing plant, with daily output of 200,000 litres. The plant now uses only molasses.
       The upgrade is a response to the sharp rise in the cost of molasses in line with sugar prices, which have risen to a 28-year high in line with a global supply shortage.
       "We want to make the production flexible so that if there is any shortage of one material, or it is too costly, we will be able to shift to use another one. This could help us maintain our ethanol output at a time when molasses prices are fluctuating," Dr Srihasak said.
       The company is also planning to build an electricity plant using biomass from waste from sugar and ethanol production.
       "We are also conducting a feasibility study to build up integrated production from upstream to downstream products that can be made from ethanol such as food ingredients and pharmaceuticals"he said."This will also ease the impact from the ethanol surplus since we are now going to invest in a second plant."
       The company will seek listing on the Stock Exchange of Thailand after 2012 in order to raise funds for financing the project, if the study finds it viable.
       Downstream products from ethanol included ethyl acetic and acetic acid,which are raw materials for printing ink and food colouring, could be sold at higher value than ethanol.
       By the end of the year, three new cassava-based ethanol plants are expected to start operations: Thai Nguan Ethanol Co with 130,000 litres a day,Ratchaburi Ethanol with 150,000 litres and Suptip 200,000 litres. E.S. Power,meanwhile, is also upgrading machinery to use cassava as well. The country's total ethanol capacity will rise to 2.27 million litres per day end of this year.
       Praphon Wongtharua, director of the Biofuel Bureau of the Energy Ministry,also warned yesterday against rumours of an ethanol shortage, possibly linked to speculators who expect prices to rise.
       "Please don't panic. There are more than 45 million litres in the stocks of ethanol producers and oil traders which could last for more than a month of domestic demand," he said.