“ ECONOMIC ANALYSIS OF PRODUCTION OF ALCOHOL, POWER AND BIOCOMPOST IN SUGAR INDUSTRY OF KARNATAKA”

The precipitated impurities contained in the cane juice, after removal by filtration, form a cake of varying -moisture content called press muds. This cake contains much of the colloidal organic matter anions that precipitate during clarification, as well as certain non-sugars occluded in these precipitates. The weight of wet press muds (80 percent water) averages about 3.4 percent cane. Press mud can be explored as biocompost when it is mixed with appropriate amount of other residues spent wash, yeast sludge and fly ash. After the drying in the open field the mass reduces to 50% of the pressmud. As per table 5 and 6, the processing of press mud to biocompost is not economically significant but pressmud along with other residues generated in sugar industry viz spent wash, yeast sludge and fly ash causes environment pollution. However, the processing of pressmud to biocompost offers two advantages one is reduction of pollution and another is as it can be sold back to sugarcane farmers on subsidies as manure. Biocompost contains, on a dry basis, about 1 percent by weight of phosphate (P 2 O 5 ) and about 1 percent of nitrogen. The the between and their The and also industry, Processing by-products of which have been diverted factory as a be diverted sugar of to serve the interest of the farmers in terms of payment of cane price and development of the area

Karnataka state stands 3 rd position in terms of sugar production and 4 th position in cultivation of sugarcane in the India. In fact, there are presently around 64 working sugar factories with annual crushing capacity of 3.29 lakh MT/day, cogeneration capacity of 1500 MW/day, alcohol production capacity of 2100 KLPD and ethanol production capacity of 1130 KLPD. In the year 2017-18, Karnataka sugar industry had crushed a total of 347.5 lakh MT of cane and produced around 36.87 Lakh MT of sugar. The sugar industry in Karnataka is able to manufacture sugar in such huge quantities due to the fact that sugarcane is abundantly available in the state. But, Karnataka encounters up and down situations of sugar production and price fluctuations after few years. However, it is realized that the importance of integrated sugarenergy complexes to counterbalance the problem of wide sugar price fluctuation in domestic market. In the present work we undertook the cost-profit analysis of production of alcohol, power and bio-compost in sugar industry of Karnataka. We found that the economic returns on capital invested on sugar mills in Karnataka would be stable, if coproducts i.e. bagasse, molasses and press mud are efficiently used for production of bio-ethanol, power and bio-compost.

…………………………………………………………………………………………………….... Introduction:-
Sugarcane has emerged as a multi-product crop for the production of sugar and certain by-products. The economically important by products are molasses, bagasse and pressmud. Molasses is used for production of alcohol, ethanol and industrially important chemicals. Bagasse is utilized as a fuel in the boilers and also used as a production of electricity, paper and particle board. Press mud also mixed with another residual output of the distillery viz. spent wash and used as biocompost. A sugar mill can thus have multiple streams of revenue from ethanol, electricity, biocompost, paper and boards, besides a host of ancillary products.
Indian sugar industry is an important agro based industry and has its big share in Indian economy. It has very strong impact on the socio-economic development of formers and rural India. In our country nearly 50 million farmers and equivalent labors are engaged in sugarcane cultivation. The Indian sugar industry currently has about 532 operational sugar mills, sugar output 251 lakh tons. Besides, about 2.7 billion liters of alcohol and 2,300 MW power and many chemicals are also produced. The industry is able to export around 1,300 MW of power to the grid. Indian sugar industry is fully capable of meeting demand of potable alcohol as well as 10% blending in gasoline. Industry ISSN: 2320-5407 Int. J. Adv. Res. 9(02), 144-151 145 is gradually transforming into sugar complexes by producing sugar, bio-electricity, bio-ethanol, fertiliser and chemicals; these contribute about 1% to the National GDP.
Karnataka sugar industries are one of the most notable sugar manufacturing state in the India. Karnataka sugar industry has been contributing nearly 15% of India's, total sugar production. The pace of growth of sugar manufacturing has been massive over the past few years. The latest sugar statistics of sugar production in Karnataka indicates that state is doing better than the other states in the country. The sugar industries had been a spectacular growth owing to the different conductive in the state. Sugarcane is one of the chief crops manufactured in Karnataka so that most of sugar industries been setup over the years in the state.
Karnataka sugar sector encounters up and down situations of sugar production and price fluctuations after few years (Fig2). During favourable market conditions the sugar mills earn profit in some years and faces huge losses at the time of low ex-factory sugar prices. Hence, it realized that the importance of integrated sugar-energy complexes to counterbalance the problem of wide sugar price fluctuation in domestic market. It is observed that the economic returns on capital invested on sugar mills would be stable, when the co-products i.e. bagasse, molasses and press mud are efficiently used for production of bio-ethanol, power and bio-fertiliser.
Literature Review:- Mahadik (1991) 1 analyzed the economics of molasses based by-products of certain districts in Maharashtra State. The study found that the utilization of the main by-products bagasse and molasses will reduce the production cost of the sugar to marginal level. The study concluded with a suggestion that every sugar factory must utilize their byproducts effectively to reduce the total cost of the sugar.
Lokhande (2005) 2 revealed in his article, that utilisation of bagasse and molasses should be initiated in every sugar mill of India. Ethanol, alcohol, and paper projects have tremendous scope for development in India. In future, 10-15% ethanol may be allowed to be blended with petrol. Bagasse based power generation projects installed adjacent to each sugar factory would fulfil need of power.
A. P. Pandey (2007) 3 revealed that in the sugar industry several by-products especially bagasse and molasses are found. At one time bagasse was used as fuel, which sugar factories did not know what to do with the accumulating molasses, a health hazards. Small cottage industries may be established for disposing these by-products in a positive way for preparing paper, cardboards, alcohol, fertilizers, cattle field etc. Apart from its manufacturing process of sugar also needs certain modification so that yield may be improved.
R K Research Report (2008) 4 concludes that the sugar industry is a major supplier of by-products like molasses for alcohol, ethanol and chemical industries, bagasse for paper industry. Indian sugar industry is dominated by the cooperative sector, which accounts for more than 55 percent in terms of the number of factories, installed. Maharashtra and Uttar Pradesh alone accounting for 60 percent of Indian's total sugar production.
Rangrajan committee (2012) 5 revealed that sugar sectors issues about cane reservation area and bonding minimum distance criterion, price of sugarcane levy sugar obligation regulated release of free sale sugar Trade policy for sugar, Regulation relating to by-products and other issues such as jute packaging materials and recommended that rationalization of sugarcane pricing and liberalization of sugar trade need to be introduced over a two to three year period, in a calibrated two recommendation of the committee namely, removal of levy sugar obligation from the sugar season 2012-13 and deregulation of release mechanism for non-levy sugar.

Objectives:-
The main objectives of our work are below 1. To understand the trend of production and productivity of sugarcane in India and Karnataka 2. To estimate the quantity of molasses, bagasse and pressmud generated in sugar industry of Karnataka 3. Cost-profit analysis of production of ethanol from molasses in Descriptive statistics are useful to describe patterns and general trends in a data set. In order to achieve the objectives the following methodologies and tools have been used. It includes numerical and graphic procedure to summarize a set of data in a clear and understandable way. To examine the nature of each series these have been subjected to different descriptive measures. Statistical measures used to describe the above series are Standard Deviation, Average, Compound Annual Growth Rate (CAGR), and Coefficient of Variance (CV). In order to find out the economic significance of production of alcohol, power and biocompost the cost-profit analysis per MT of cane crushed was carried out.
There is no empirical data yet available on the cost of production of alcohol, power and biocompost in India. The value used in this model is based off of an estimate from the Indian National Sugar Institute 6 of the difference in conversion cost of alcohol, power and biocompost from molasses, bagasse and pressmud compared to crushing of sugarcane to sugar. Cost data for the distillation of molasses to produce ethanol was obtained from the All India Distiller's Association.

Result and Discussion:-Production Trend of Sugarcane: Area of Cultivation, Production and Productivity:
The sugarcane is grown in 21 various States of India on 50 lakh hectare area. The top 4 sugarcane-cultivating states of India are UP, Maharashtra, Karnataka and Tamil Nadu-in that order, with Bihar ranking fifth. Figures 1 below provide data on sugarcane production and the area under cultivation, respectively, for 2016-17, where the top four sugarcane-producing states accounted for almost 80% of the country's production. In relation to this, it is unsurprising that almost 80% of the gross-cropped area under sugarcane in India fell within the top four States. Karnataka is by far the third largest sugarcane producer, producing 9 percent of the country's total cane output. sugarcane production and productivity is higher as compared to India on whole and Karnataka being top when compared all other cane producing states including UP.
However, climatic conditions, inadequate availability of quality seed and irrigation facilities, lack of efficient technology and inadequate farm credit were primarily responsible for fluctuating yield ratio. As in the case of the rest of the country, sugar industry in Karnataka also is facing with unpredictability due to a number of reasons including uncertainties in sugarcane production on account of weather and rainfall conditions. The major benefits of Karnataka sugar industry are many as it has generated many facilities in the state such as communication, employment and transport. Production Trend of Sugar and By-products in Sugar industry of Karnataka: India's higher sugarcane prices remain a challenge; and cost of sugar production remains high. In the white sugar Indian prices remain uncompetitive (Fig2). This competitive disadvantage vis-à-vis subdued global price makes Indian exports uncompetitive. To combat this, government has taken many measures, namely increasing import duty and removal of export duty, stock holding limit on sugar mills to reduce inventory (minimum indicative export quotas or MIES) etc. India currently has over 70 lakh tons of surplus sugar. Impactful diversion of surplus sugar into ethanol will need time to fructify. 148 Karnataka Sugar Industry ranks 3 rd in terms of its contribution of sugar in the total sugar production in the country (Fig1) The Sugar Industry in Karnataka is able to manufacture sugar in such huge quantities due to the fact that sugarcane is abundantly available in the state. The major benefits of Karnataka Sugar Industry are that it has generated many facilities in the state such as communication, employment, and transport. It has also benefited the state by helping in the development of the rural areas of the state by mobilizing the various resources of the villages. The Sugar Industry in Karnataka contributes around 36 crore per year to the state exchequer in central excise duty. It also contributes more than 900 crore in the form of turnover tax and sales tax to the state exchequer. The state government in an attempt to boost Karnataka Sugar Industry has set up the Karnataka Sugar Institute (KSI) which has emerged as a center for education and training for sugar technology. The Karnataka Sugar Institute also provides important support to the Sugar Industry in Karnataka by doing R&D in the various aspects of sugarcane processing and production.

Cost Profit Analysis of Bagasse based Power Generation:
Bagasse is a fibrous residue of the cane stalk left after crushing and extraction of juice. Bagasse production is seasonal so it must be stored over the period when production is stopped. In processing of one Metric tonne of sugarcane produce 300 kg bagasse. Production of bagasse is depending on fiber in sugarcane. Generally 30 percent fibers are in sugarcane. There are various options in case of bagasse (a) it can be selling in the market (b) use for production of paper and (c) used for co-generation. In Karnataka, paper mills as a by-products were not successful. Paper mills were closed, due to financial problems in the market; bagasse can be used for co-generation.
In the first stage we have calculated the economic situation, when bagasse sold in the market. It can be depicted from above table no. 2 that the production of bagasse depends upon the quantity of sugar cane crushed. The fluctuating trend in bagasse production is seen throughout the study period. Thus ex-mill price of bagasse always varied from year to year. Average selling price of bagasse is of about Rs. 1600 per MT. At the time of selling of bagasse excise duty/GST/VAT is collected by the sugar factory and then deposited to government accounts. Hence, the amounts of such taxes are not considered wile calculation of bagasse selling price.
1 MT of bagasse has a potential of generating power of around 100 KWhr with 75 KWhr surplus power for export. In Karnataka, when one MT of sugarcane crushed around 300 kg of bagasse is generated out of which major amount of bagasse is used up for heating purpose in boilers and around 70kg of bagasse becomes surplus that can be used for generation of electricity. If that 70 kg of bagasse is used to generate power at co-generation unit it can produce 43 KWhr with Rs.2 conversion cost per KWhr. From the table 5 and 6 it is clear that for net revenue of around Rs 184 per 1 MT of cane crushed is generated from the production and sale of surplus power of 43KWhr. The cogeneration of power in sugar industry results in the net profit of Rs. 72 every 1MT of sugarcane crushed with 64 percent raise in the net profit as compared to the revenue generated from direct sale of bagasse.

Cost Profit Analysis of Molasses based Alcohol Production:
Molasses is a residue of sugar industry and obtained after the sucrose has been crystallized and centrifuged from evaporated cane juice. Molasses contain sucrose, invert sugar, salt and the entire alkali soluble non sugar ingredient. 45 Kg. molasses is obtained from crushing of 1 M.T. cane. Molasses are used in different by-product as a raw material. Rectified spirit, country liquor, fuel oil use molasses as a raw material. Molasses can be sold in the market or it is used in production of above by-products.
The average selling price of molasses is Rs 5,000 per M T (Table 4). However, at the time of selling of molasses excise duty/GST/VAT is collected by the sugar factory and then deposited to government accounts. Hence, the amounts of such taxes are not considered wile calculation of molasses selling price. 151

Cost Profit Analysis of Pressmud based Biocompost Production:
The precipitated impurities contained in the cane juice, after removal by filtration, form a cake of varying -moisture content called press muds. This cake contains much of the colloidal organic matter anions that precipitate during clarification, as well as certain non-sugars occluded in these precipitates. The weight of wet press muds (80 percent water) averages about 3.4 percent cane. Press mud can be explored as biocompost when it is mixed with appropriate amount of other residues spent wash, yeast sludge and fly ash. After the drying in the open field the mass reduces to 50% of the pressmud. As per table 5 and 6, the processing of press mud to biocompost is not economically significant but pressmud along with other residues generated in sugar industry viz spent wash, yeast sludge and fly ash causes environment pollution. However, the processing of pressmud to biocompost offers two advantages one is reduction of pollution and another is as it can be sold back to sugarcane farmers on subsidies as manure. Biocompost contains, on a dry basis, about 1 percent by weight of phosphate (P 2 O 5 ) and about 1 percent of nitrogen.

Conclusion:-
Production of by-product helps in generation of additional income that can help the sugar mills to make up the accumulated losses. The cost-profit analysis gives the details about the income generated by sugar mills of Karnataka.
The study reveals the comparison between of sugar factory and their by-product unit profit and losses. The selling price of sugar has kept fluctuating throughout the study period and also due to seasonal nature of sugar industry, the industry has been running into the losses. Processing of by-products has led to earning of profits which have been diverted towards the sugar factory as a result of which the factories have been able to make up their losses and earn profit. The profit earned can be diverted towards sugar factory. This will help to the sugar industry of Karnataka to serve adequately the interest of the farmers in terms of payment of cane price and development of the area concerned.