Ethanol plants constantly run into losses

The ethanol plants run by Vietnam Oil and Gas Group (PVN) are facing many troubles due to low consumption at home and export prices below production costs.PVN chairman Phung Dinh Thuc said his group was operating two ethanol plants, o­ne in Dung Quat, Quang Ngai and o­ne in Binh Phuoc. Meanwhile, the plant in Phu Tho will start production soon, said Thuc at a press briefing o­n the 2012 business performance of PVN last Thursday.It now costs 15,000 VND to produce a liter of ethanol, while export prices are o­nly around 13,000 VND, he informed.“We are studying how to operate these ethanol plants efficiently. We have developed ethanol plants but ethanol use has been limited,” he said.As per a schedule approved by the Government, petrol with 5% bio-ethanol content, or E5 petrol, will be officially sold in Hanoi, Haiphong, HCMC, Can Tho, Danang, Ba Ria-Vung Tau and Quang Ngai in late 2014. Later, from December 1, 2015, E5 petrol will be widely available nationwide.This promises outlets for ethanol producers. In addition, cassava farmers may no longer suffer poor sales after each harvest.However, the period of nearly two years from now to late 2014 will be challenging for local ethanol plants.Nguyen Anh Toan, deputy general director of PV Oil, a member of PVN, told the Daily that the two ethanol plants of PVN in Quang Ngai and Binh Phuoc began production in the second quarter of 2012. Most of their products are exported and less than 10% are consumed locally.In 2012, PV Oil sold nearly 200,000 liters of E5 petrol, versus the annual capacity of 100 million liters of each of the ethanol plants that PV Oil invests in.According to a previous plan, five ethanol plants would have begun operations by 2012. However, given the trivial market share of E5 petrol, some plants are still o­n a trial run, leading to a huge volume of cassava being unsold.