DETAILED PROJECT REPORT (DPR) ON 50 KLPD ETHANOL PLANT PDF

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DETAILED PROJECT REPORT (DPR) ON 50 KLPD ETHANOL PLANT FROM CANE MOLASSES AT Village Nani Paniyali, PO Palitana, District Bhavnagar, Gujarat. Prepared for M/s. Yeast Alco Enzymes Ltd. Registered Office: Divya Apartment Nr. Mithakhali Garnala Navrangpura Ahmedabad 380009 Prepared by NMR Technocon. 50...

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DETAILED PROJECT REPORT (DPR) ON

50 KLPD ETHANOL PLANT FROM CANE MOLASSES AT Village Nani Paniyali, PO Palitana, District Bhavnagar, Gujarat.

Prepared for

M/s. Yeast Alco Enzymes Ltd. Registered Office: Divya Apartment Nr. Mithakhali Garnala Navrangpura Ahmedabad 380009 Prepared by

NMR Technocon. 502, Pelican, Nyati Encalve, mohammadwadi Hadpasar, Pune 411028

February, 2016

NMR Technocon

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DETAILED PROJECT REPORT (DPR) ON 50 KLPD ETHANOL PLANT FROM CANE MOLASSES TABLE OF CONTENTS Chapter No.

1. 1.1 1.2 1.3 1.4 1.5 1.6 1.7 2. 2.1 2.2 2.3 2.3.2 3. 3.1 3.2 3.3 3.4 4. 4.1 4.2 5. 5.1 5.2 5.3 5.4

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DISCLAIMER EXECUTIVE SUMMARY INTRODUCTION Project Background Promoter’s Background & Experience Cane Availability Projections Ethanol Industry Objectives & Scope of Work Methodology Acknowledgements PRODUCTS & PROCESS Products Process Requirement of Molasses Molasses balance SITE DETAILS AND INFRASTRUCTURE Project Site, Key Features Raw Materials Utilities & Consumables Manpower DESIGN BASIS Introduction Design Basis, Fuel ethanol from molasses PLANT LAYOUT Layout Considerations Ash, Effluent and Sewage Disposal Plant Layout Approach and Internal Roads

Yeast Alco Enzymes ltd. Palithana Gujrat

I – VII 12 12 13 14 18 18 18 19 19 21 21 23 24 24 25 26 26 30 30 31 31

50 KLPD Molasses Based Distillery

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DETAILED PROJECT REPORT (DPR) ON 50 KLPD ETHANOL PLANT FROM CANE MOLASSES TABLE OF CONTENTS Chapter No. 6 6.1 6.2 6.3 6.4 6.5 7. 7.1 7.3 7.4 7.5 7.6 7.7 8. 8.1 8.2 8.3 8.4 9. 10. 10.1 10.2 10.3 10.4

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PROJECT PREPAREDNESS AND IPLEMENTATION SCHEDULE NoC’s / Approvals / Permissions Management & Administration Technical & Financial Tie Ups Project Management Implementation Schedule ESTIMATED CAPITAL EXPENDITURE Land & Site Development Equipment Miscellaneous Fixed Assets Preliminary & Pre-operative Expenses Contingencies Margin Money for Working Capital FINANCIAL VIABILITY Basis & Assumptions Cost Summary Means of Finance Financial Viability Indicators SOCIO-ECONOMIC AND ENVIRONMENTAL BENEFITS CONCLUSIONS & RECOMMENDATIONS Project SWOT Analysis Risk & Mitigates Key Management Features Conclusions & Recommendations

Yeast Alco Enzymes ltd. Palithana Gujrat

32 32 33 33 33 35 36 36 36 37 37 38 40 40 40 42

43 44 44 44

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DETAILED PROJECT REPORT (DPR) ON 50 KLPD ETHANOL PLANT FROM CANE MOLASSES

LIST OF SCHEDULES Schedule No.

Title

A

Cost of Project & Means of Finance

B

Estimated Cost of Production & Profitability Statement

C

Debt Service Coverage Ratio

D

Cash Flow Statement

E

Balance Sheets Forecast

F

Breakeven Analysis

G

Sensitivity Analysis

H

Payback Period

I

Molasses Production/Sales/ Stock details

Yeast Alco Enzymes ltd. Palithana Gujrat

50 KLPD Molasses Based Distillery

NMR Technocon

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DETAILED PROJECT REPORT (DPR) ON 50 KLPD ETHANOL PLANT FROM CANE MOLASSES

LIST OF APPENDICES Appendix No. I II III IV V VI VII VIII IX X

Title Company Incorporation Certificate Promoter Details of YAEL Plant layout Annual Reports of YAEL IEM License for ethanol Plant Detailed Land Documents Detailed Process Description and Flow Charts Technical and commercial offers Implementation Schedule Processes available for Effluent Treatment – Merits and Demerits

Yeast Alco Enzymes ltd. Palithana Gujrat

50 KLPD Molasses Based Distillery

NMR Technocon

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DISCLAIMER 1. This Detailed Project Report (hereinafter referred to as Report), the business plan/financial projections, if any and its contents are confidential. Accordingly, Report and its contents are on basis that will be held in complete confidential. 2. By accepting a copy of this report, the recipient agrees to keep its contents and any other information, which is disclosed to such recipient, confidential and shall not distribute , divulge disseminate any information contained herein, in part of in full, without the prior approval of NMR Technocon (NMR). 3. This report is prepared exclusively for the benefit and for the internal use of the recipient and /or its affiliates and does not carry any right of publication or disclosure to any other party in any case. 4. The client has engaged NMR for preparation of Detailed Project Report on 50 KLPD ethanol plant, we have relied upon and assumed, without independent verification, the accuracy and the completeness of all information given by the client which has frequently been referenced in this report. 5. The Report developed by NMR has used inputs and conclusions drawn out of discussion with the client and reference to project specific studies, and other information/documents obtained by NMR from various sources/available publicly, which NMR believes to be reliable. NMR has not carries out any independent verification for the truthfulness of the same and its accuracy and reliability cannot be guaranteed. 6. NMR and their respective team (collectively referred to as “Relevant Persons”) expressly disclaim any responsibility or liability for any loss, damage or inconvenience caused to anybody whether directly or indirectly due to this Report and the information contained herein. NMR may be exempted from all errors and omissions in this Report. 7. This presentation may include future expectation, projections, or forward looking statements. These forward looking statements involve known and unknown risks, uncertainties and other factors that may cause actual events to be materially different from future events expressed or implied by such forward looking statements. 8. This report is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which would subject NMR and its affiliates to any registration or licensing requirement within such jurisdiction. Persons in whose possession this document may come are required to inform them of and to observe such restriction. Prepared by Rohan Sinha Consultant

Yeast Alco Enzymes ltd. Palithana Gujrat

Checked By M.P. Sinha CEO

50 KLPD Molasses Based Distillery

NMR Technocon

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Executive Summary Project at a Glance Yeast Alco Enzymes Limited (YAEL) is a company registered in state of Gujarat under the companies Act, 1956. The promoters sensed the great availability of sugarcane in the saurashtra region of Gujarat and increasing demand of power & ethanol and keeping in view, the needs of the local farmers, those cultivate sugarcane in the command area with great demand of Ethanol. The proposed ethanol plant project will produce fuel ethanol from molasses available from the other sugar factories in surrounding areas. The steam will be generated by the boiler and the power will be purchased from already established power supply grid to the factory location. The factory was functional till 2010 and it was closed due to decreasing efficiency and high maintenance of the old plant, but now the CMD of the company Mr K.S PravinSingji R Jadeja is willing to revive the company with totally new plant and machinery setup at the same location. The factory is spread across 24 acres of land which is not hypothecated in any institution. The factory has Licence to operate the distillery from. The company also has all the pollution clearance with them from Gujarat pollution board and GPCB to operate the distillery in the stated location.

Project Rationale The promoters have extensively and carefully analyzed the present and future scenario of Ethanol. They have also studied carefully the present irrigation facilities and surplus molasses, as well as future potential of ethanol demand in the area. The command cane area has excellent irrigation facilities due to the perennial water source. With this background, the promoters have finalized the said project. Promoters having experience in distillery and have been able to foresee the ethanol potential in the command area. YAEL will generate about 135 Lacs Litter of ethanol will be generated using 54000 MT of molasses, with average 250BL/Ton of Ethanol recovery in 270 days of working in an year. The molasses required for 270 days of working will be procured from nearby stand alone Sugar factories which do not have distillation unit with them. The current policies in India are conducive and backed by favourable regulatory framework for manufacture of fuel ethanol, as well as regarding support for private investment in such project. The promoters also have acknowledged in depth, the socio-economic and environmental value addition of the captioned project to the local people, region, State and the Country, as well as its win-win situation to all the stakeholders involved. Yeast Alco Enzymes ltd. Palithana Gujrat

50 KLPD Molasses Based Distillery

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The Promoters & Project Preparedness YAEL is promoted by Shree. K. S. Pravinsinhji R jadeja Smt M.H. Mankumraidevi The CMD of YAEL is highly educated and has 25 years of experience in the distillery industry. His huge practical experience in distillery industry will be immensely helpful in executing and operating the proposed ethanol project. The management has successfully operated the same distillation plant in profit for 20 years with best efficiency soon after commencement of the plant in 1984. The unit was one of the best performing unit as per AIDA (All India Distillery Association) monthly efficiency data published every month for all Indian Distilleries. Mr M.P.Sinha presently chief consultant appointed to erect and operate the unit now, was associated with YAEL during 1982 to 1987 as General manger of the unit. The unit had been one of the first three efficient Distilleries on all India bases and at plenty of times the unit was best as per the AIDA efficiency standard which can be even now cross checked through AIDA data bank.

YAEL already has a technical / managerial team of highly qualified engineers, contract & arbitration experts, agricultural officers and managerial personnel for implementation and operation of the captioned project. YAEL has already obtained IEM from the Ministry of Commerce & Industry, Govt. of India for setting up 50 KLPD ethanol plant. Project in Brief The proposed ethanol plant of 50 KLPD capacities will employ fermentation, multi pressure distillation system, & composting. Nearby Sugar mill will supply molasses, while the boiler will provide the steam and power will be purchased from the grid for the proposed ethanol plant. Financial Highlights Project Cost: Particulars Land and Site Development Buildings Indigenous Plant and Machinery Miscellaneous Fixed Assets Prelim. & Preoperative Expenses Contingencies Working capital margin Total

Yeast Alco Enzymes ltd. Palithana Gujrat

(Rs. Lakh) Ethanol Plant 0 25 1593 166 100 56 860 2800

50 KLPD Molasses Based Distillery

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Means of Finance: (Rs. lakh) Ethanol Plant 603 2170 2800

Particulars YAEL Equity / Internal accruals (32%) Bank / F. I. Loan (68%) Total

Estimated W/C Requirements Estimated Annual Turnover Profit Before Tax Accumulated Cash Surplus Employment potential Debt Service Coverage Ratio (DSCR)

Payback period Rate of Return on total project cost

Rs. Lakh Rs. Lakh Rs. Lakh Rs. Lakh Nos. Average

First year 1039.07 5085.15 762.29 736.22 54 2.16

Maximum Minimum Years %

2.66 1.35 4 14.46 %

Fifth year 1386.71 6538.05 1015.94 859.81 54

Strengths The main strengths of this integrated project include: 1. Background and experience of the promoters in running distillery with utmost efficiency which was dully recognized by AIDA (All India Distillery Association) 2. The Company has IEM from the Ministry of Commerce & Industry, Govt. of India for setting up 50 KLPD ethanol plant. 3. Commitment & vision of promoters, with forward integration planning to re-establish the plant. 4. Excellent irrigation facilities with a reservoir dam in very close proximity to provide water to the plant 5. Many stand alone distilleries in 300KM radius to provide molasses to ensure 270 days of functioning. 6. Building construction and foundation is already in place. 7. Project location in potential sugarcane rich area 8. Ensured molasses availability 9. Demand supply gap in fuel ethanol in India 10. Conducive policy / regulatory frame work 11. High order of socio-economic and environmental value to the local populace 12. All pollution clearance from Gujarat pollution board and GPCB to consent to operate at the location 13. Latest technology equipment with highest efficiency 14. Sound techno commercial viability Yeast Alco Enzymes ltd. Palithana Gujrat

50 KLPD Molasses Based Distillery

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Risks Factors Risk Factors Industry Risk

Implementation Risk

Operating Risk

Credit Risk

Financial Risk

Yeast Alco Enzymes ltd. Palithana Gujrat

Remarks The Industry is cyclical and highly regulated. The price of Ethanol is directly controlled by the govt. The factory has strategically located in heavy sugar belt with many stand alone sugar mills to provide molasses for smooth functioning. Therefore, the company has the ethanol plant to protect its margins and profitability and avert cyclicality. YAEL has experienced people in its management team. Keeping in view overall good track record, it is felt that YAEL has the competence for timely implementation of project as per the schedule. The new ethanol plant shall be implemented on turnkey basis. The ethanol project being implemented on turnkey basis, will reasonably assure completion of the project within the envisaged cost. However, any increase in cost of plant & machinery shall be met by the internal accruals. The company is not new to the production and marketing of rectified spirit, it is in the business of manufacturing and marketing of rectified spirit for more than 31 years. The new ethanol project plant is being implemented on a turnkey basis and will be backed by suitable clauses in terms of warranty and guarantee. As such it is felt that the operating risks would be mitigated to a considerable extent. Though the availability of adequate quantity of molasses is also dependent on the supplies from neighbouring units, the company has identified nearby sugar mills from where molasses can be sourced. Average DSCR of the ethanol project is estimated to be 2.16, which is satisfactory. YAEL has been regular in meeting its commitments to FIs/Banks and SDF. The company is comfortably placed to infuse its equity contribution in the project and is awaiting sanction of term loan from banks. As such, no problem is envisaged

50 KLPD Molasses Based Distillery

NMR Technocon

Raw Material Risk

Market Risk/ off take risk/ payment risk

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YAEL has announced a reasonable remunerative price in line with the market trend and neighbouring sugar mills. The molasses required for the ethanol plant shall be readily available from the nearby sugar plant. The Neighbouring sugar mills has already shown willingness to supply the molasses. The Govt. of India has allowed mixing 5% ethanol in petrol and has increased of ethanol percentage to 10%, recently. Since there is need for huge investment to set up additional required capacity of 96 million litres of ethanol by 2017, YAEL is not expected to face any problem in selling the ethanol from proposed project.

Implementation Schedule The entire project will be commissioned by December 2016 after the financial closure expected by March 2016. Meticulous planning and strong project management proposed will ensure this schedule. Conclusions Over all, the project is well conceived and conceptualized, with sound commercial viability. The expected financial returns are quite satisfactory. The project is being implemented by promoters having requisite background and experience and with employment of experienced professionals, experts and consultants. All perceived risks have adequate safe guards. The project is recommended for lending by financial institutions, as well as SDF.

Yeast Alco Enzymes ltd. Palithana Gujrat

50 KLPD Molasses Based Distillery

NMR Technocon

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CHAPTER – 1 INTRODUCTION 1.1 Project Background 1.1.1 This Detailed Project Report (DPR) has been prepared for M/s Yeast Alco Emzyme Limited. (YAEL) by NMR Technocon (NMR), Pune, for setting up 50 KLPD ethanol plant from molasses as raw material at Village palitana, PO palitan, District Bhavnagar, Gujarat. 1.1.2 M/s Yeast Alco Emzyme Limited., is a Limited Company registered in the State of Gujarat under the Companies Act, 1956. YAEL has been established in 1982 and has been smoothly managed by the CMD Mr K.S Pravinsinhji R Jadeja. Appendix I gives certificate of incorporation & commencement of business and Memorandum of Association & Articles of Association of YAEL. YAEL proposes to revive the company by procuring new plant and machinery for the plant location with 50KLPD capacity in Village Nani Paniyali, PO Palitana, District Bhavnagar, Gujarat. 1.1.3 YAEL has valid IEM from the Ministry of Commerce & Industry, Govt. of India for running 50 KLPD ethanol plant. Appendix III gives IEM license for ethanol plant 1.1.5 Water required for the proposed fuel ethanol plant will be made available through dam which is very near to the plant location. The company has all the clearance to procure water from the dam for the factory functioning. 1.2 Promoter’s Background & Experience YAEL is promoted by:Shree. K. S. Pravinsinhji R jadeja Smt M.H. Mankumraidevi The CMD of YAEL is highly educated and has 35 years of experience in the distillery industry. His huge practical experience in distillery industry will be immensely helpful in executing and operating the proposed project. The management is successfully operated the unit till 2010 since commencement in 1984.

Appendix-II Audited Annual report provides the Promoter Details of YAEL along with the share holding. After scrutinizing the bio-data and experience of key Directors, it is identified that the management of YAEL is capable of undertaking the captioned integrated project. Yeast Alco Enzymes ltd. Palithana Gujrat

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NMR Technocon

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Under the guidance of Shri K.S Pravin Sinhji Jadeja, CMD with his management team have already carried out several activities in the command area, including land acquisition, site development etc. YAEL is also planning for cane development in command area. A dedicated Project Team of YEAL has been functioning since September, 2015, along with appointed experts and consultants, for speedy and successful commissioning of this project. YAEL already has a technical / managerial team of highly qualified engineers, contractors & arbitration experts, agricultural officers and managerial personnel for implementation and operation of the ethanol project. Molasses Production on cane in the command area:

A. SO...