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Jagatjit Industries to set up ethanol plant in Punjab

The liquor manufacturer will invest Rs 210 cr in the project

Jagatjit Industries to set up ethanol plant in Punjab

New Delhi: Jagatjit Industries Ltd, which is into liquor business, will invest Rs 210 crore to set up a grain-based ethanol manufacturing plant in Punjab to encash rising demand of this green fuel for blending with petrol, a top company official said.

Founded in 1944, Jagatjit Industries is one of the leading firms in manufacturing of Indian Made Foreign Liquor (IMFL) and country liquor in the country. The company, which is listed on Bombay Stock Exchange, has manufacturing facilities in Kapurthala ( Punjab) and Behror (Rajasthan). "We are setting up a greenfield grain-based ethanol manufacturing facility at Hamira, Kapurthala district in Punjab with a capacity of 200 kilo litres per day (200 KLPD). The total project cost is around Rs 210 crore," Roshini Sanah Jaiswal, Promoter and Chief Restructuring Officer of Jagatjit Industries, said. The investment will be funded through bank loans and internal accruals, she said. The company has already received environmental clearance and obtained a licence from Ministry of Forest and Environment for setting up the ethanol manufacturing facility, which will be spread across 25 acres of land. The plant is expected to be operational from June 2024.

"We will supply ethanol to oil marketing companies (OMCs)," Jaiswal said. Once operational, ethanol will contribute 20 per cent of the company's total revenues in 2024-25, rising to 25 per cent share in 2025-26. "The government has made it very attractive for companies to set up ethanol blending plants to achieve 20 per cent blending by 2025," Jaiswal said, adding that India's crude oil import bill would come down significantly leading to a huge saving of foreign exchange reserve.

“We expect a revenue escalation from the ethanol plant at close to Rs 400 crore with a significant EBITDA margin from year one. The increased cash flows will get ploughed back into the IMFL business," Jaiswal said.

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