BIO ENERGY: OUR PLAN

BIO FUELS

India’s ambitious plans and requirements for capital fit well with Terravana’s vision: to strengthen producers across emerging economies through healthier sources of energy. Bioethanol will continue to be in high demand in the coming years from oil companies, mitigating risk in the portfolio and adding value for shareholders.

There are several crops deemed suitable for the production of bioethanol including sugarcane and cassava – the latter of which has been used for production in South East Asia, but never before in India. Terravana is hoping to capitalise on the gap in the bioethanol market by introducing the first cassava growing programme in India.

1,000,000
farmers by 2020
10,000
hectares of cassava in 2 years
200
million dollars of investment in 24 months

BUSINESS MODEL

As part of our goal to add 1,000,000 farmers to the value chain by 2020, we aim to create and build a farming, processing, and sales and distribution company of bioethanol from cassava in India. Terravana plans to set up four plants, with an annual capacity of 45 million metric litres of ethanol each, over the next two years.

Farming for cassava will begin with a plantation area of 2,500 hectares, expanding to 10,000 hectares in two years. This will enable us to provide local economies with a semi-automated farming system, alongside guaranteed jobs for local people.

Our distilleries – where enzymatic production of ethanol from cassava starch will take place – will see Terravana’s footprint expand across four South Indian states: Andhra Pradesh, Karnataka, Telangana, and Tamil Nadu.

Our sales and distribution network will encompass both public and private sector oil marketing companies in the local market, including Indian Oil Corporation, Hindustan Petroleum Corporation Limited and Bharat Petroleum Corporation Limited.

TIMELINE & INVESTMENT

We plan to implement a phased growth strategy from June 2019, when Terravana will launch its pilot project. The first 18 months will see a feasibility study conducted, followed by construction of the first plant in Kakinada, Andhra Pradesh. We will then initiate construction of plants in Warangal, Telangana; Bidar, Karnataka; and Salem, Tamil Nadu. By the end of the period, we will be cultivating our first cassava crop at Kakinada.

Our growth phases will kick off in January 2021. Sales and marketing processes will be implemented at the Kakinada plant, while construction will be completed at the remaining three plants. By the end of the year, both the Kakinada and Warangal sites will be at 65% capacity.

From January 2022, Terravana’s Bio Energy segment will be all about scaling up and finalising the sales and marketing processes. All our plants will be at a minimum of 65% capacity. By 2022 we also aim to set up and operate plants across South India with a combined annual capacity of 180 million litres.

Our Bio Energy segment is our largest, and therefore our most cost intensive. We will be investing $200 million in 24 months across three tranches of investment - though much of this will be reinvestment of earnings to reduce cash outflow. The business will be at 3x scalability by 2022, with 100% top line growth year on year.