Praj to Start Building India Sugar-Cane Waste Fuel Plant by May

Praj Industries Ltd., an engineering company backed by billionaire Rakesh Jhunjhunwala, expects to begin construction on a $30 million biofuel demonstration plant in India before building one in the U.S.

Construction on the 30,000-litre (7,925-gallon) facility will begin in May, near the company’s headquarters in Pune, India, Chairman Pramod Chaudhari said today in telephone interview. Praj Industries has been operating a smaller pilot plant in India that produces fuel from sugar-cane waste for four years.

The company expects to design, build and sell its first “medium-sized” cellulosic-ethanol plant next year, probably in the U.S., he said. The U.S. plans to mix 16 billion gallons of biofuels from sources other than corn with gasoline annually by 2022. That will create a $130 billion market for producers of ethanol equipment, Chaudhari said.

“I hope these projections come true,” Chaudhari said. “In the long term this is going to be the solution for the whole biofuel industry.”

Two sites for the demonstration plant have been selected within 400 kilometers of the company’s headquarters, he said. Production costs may be as low as $2 a gallon depending on the cost of raw material.

Praj Industries gets about 80 percent of its revenue from sales of ethanol-related equipment, he said. This figure will fall as it diversifies into other areas including waste-water treatment.

To contact the reporter on this story: Stephan Nielsen in Sao Paulo at snielsen8@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

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