Praj bags $20 mn order from US ethanol plants

Bio-fuel technology major Praj Industries has bagged two orders worth $20 million to supply production technology and machinery for two ethanol plants in the US.

The order not only marks the successful entry into a stringent market such as the US, but also promises a quantum leap for Praj in its quest of becoming the world leader in ethanol plants.

The order is the company's largest ethanol-making installation after the two 3,00,000 litres per day plants it supplied to in Columbia earlier this year.

Pramod Chaudhari, chairman, Praj Industries, said on Tuesday that the order by California-based Cilion group is to supply technology and machinery to erect two ethanol plants of 6,00,000 litres per day (55 million gallons per year) capacity each.

Chaudhari said the Cillion group is planning eight ethanol plants and has selected Praj's technology for four of them.

"The company has been selected for supply of machinery for the first four plants. Cilion has yet to release machinery orders for the other four," he clarified.

The order will be commissioned over a period of 12 to 15 months, he said, adding that the machinery will be manufactured in the company's factories in India.

This order is a manifestation of the efforts of Praj and its vast and varied experience in the ethanol industry, Chaudhari said. "With these contracts, Praj will be recognised as a major supplier to ethanol plants," he said.

The financial fallout of the order will be partly witnessed in the current year itself, Chaudhari informed, adding that the company's sales revenue mix will shift strongly in favour of exports from the current 55:45 tilted towards the home market.

The company's forays into the US markets will also pick up, Chaudhari said.

"We are looking at strong engineering capabilities that are suitable for us in our expansion in the US, though we have neither finalised a target for acquisition nor firmed up the possible structure of our business entity," he clarified.

Chaudhari informed that the company is planning to set up a new research and development centre at Pune in order to focus on industrial biotechnology such as bio-fuels and bio-energy technologies.

The investment for this project is estimated at around Rs 20 crore, he said.