With the hand sanitiser manufacturing capacity touching 300,000 litres a day and the market supply gradually stabilising, the Uttar Pradesh sugar mills engaged in the production of alcohol based sanitiser have sought the export permission.
On May 6, the Centre had banned the export of alcohol based sanitiser to maintain domestic market availability to control the spread of covid-19, although non-alcohol based sanitisers are allowed for shipments.
Currently, 87 units in UP are commercially manufacturing hand sanitiser, of which 37 are standalone sanitiser plants, 27 sugar mills, 12 distilleries and 11 independent entities.
According to sources, some leading private sector sugar manufacturers, who have set up additional hand sanitiser facilities too, have applied for the export permit in view of bulk production.
“Given the substantial installed capacity and robust supplies, there are chances of a glut situation if newer markets are not explored, including exports,” an industry source told Business Standard on condition of anonymity.
Against the collective hand sanitiser production capacity of 300,000 litres, the current output is to the tune of between 225,000 and 250,000 litres per day, UP sugar industry and sugarcane development principal secretary Sanjay Bhoosreddy said.
“The hand sanitiser units in UP are now getting trade enquiries from foreign buyers as well,” he said adding the government is focussing on first ensuring adequate supply in the domestic market before exports could be considered.
Meanwhile, the state government revenue following copious sanitiser production over the past two months has also soared by about 400 times.
Against the annual revenue of Rs 8.36 lakh from the production of 8,777 litres of hand sanitiser by a single unit earlier, the total revenue accruing in less than 50 days from March 23 to May 9, 2020 amounted to nearly Rs 36 crore by way of denaturation fee, license fee and goods and services tax (GST).
Although, the 2019-20 sugarcane crushing season in UP will end in the coming weeks, the mills are expected to continue with the hand sanitiser production, since they have abundant stock of ethanol/alcohol for use as industrial input.
So far, all the state units have collectively produced 7 million litres (ML) of hand sanitiser, of which nearly 5.9 ML had already been supplied to the retail market, including other states.
The mills, which have set up hand sanitiser facilities pertain to all the major private sugar companies, including Balrampur Chini, Birla, Dalmia, Dhampur, Uttam etc.
While, some sugar mills are manufacturing bulk quantities of hand sanitiser themselves or supplying to other firms for bottling and marketing, a few others have signed contracts to supply ethanol/ethyl alcohol/extra neutral alcohol (ENA) to external plants.
While, sanitisers are generally manufactured with isopropyl alcohol (IPA), they have also been found effective if made from ethanol/ethyl alcohol/ENA, which are sugar byproducts.