Hit by credit crunch, Sterling goes slow on biofuel plansSeptember 29th, 2008 - 4:10 pm ICT by IANS
Chennai, Sep 29 (IANS) The Rs.65-billion ($1.4-billion) Sterling Infotech Group, which has interests in renewable energy and biofuel among other business interests, is going slow on its ambitious ethanol production plans in the US and India, thanks to the global credit crunch and high corn prices.”Corn prices have gone up while the crush margin has come down. Further, after the sub-prime crisis, debt is not available. We had hoped to raise $150-million debt funds for our projects,” said V. Srinivasan, chief executive and director of Siva Ventures Ltd, the group’s holding company.
As per initial plans, E85 Inc, a US-based ethanol manufacturing subsidiary, was to have built 10 captive facilities throughout North America, at times using network contract manufacturers, Srinivasan told IANS.
The Sterling group is also going slow on its plans to produce ethanol from sorghum, tapioca and sugarcane.
Srinivasan, however, said though the biofuel production plan is getting delayed, the company’s operations in the renewable energy sector are expanding.
The group, which acquired Finnish wind turbine manufacturer WinWinD Oy two years ago, is setting up a turbines manufacturing unit near Chennai on an outlay of Rs.3.75 billion ($80.76 million). The plant, once complete, is expected to produce 2,500 turbines and nascelles per annum.
“Initially, the plant will make 1 MW wind turbines as well as the blades. Production will match the market demand, and over a period of three years, the output will be ramped up. Later, we will start production of 3 MW turbines,” Srinivasan said.
The wind turbine assembly facility is located in 26 acres while the blade plant will be located over 40 acres.
“Initially, the production will be for the domestic market and later we will look at exports,” he added.
The group forayed into the wind energy sector in 2006 by acquiring 40 percent stake in WinWind Oy for 22 million euros ($32 million). Later, the group upped its holdings to 90 percent.
Sterling also has business interests in shipping, real estate, engineering and construction sectors.
In February 2008, Sterling Infotech acquired a Norwegian shipping company JB Ugland Shipping for $300 million. It has also bought 15 percent stake in Sahara One Media Entertainment and Best and Crompton Engineering Ltd.
“We are on the look out for suitable coal mines in Indonesia. The coal could be shipped to India through our dry bulk carriers,” Srinivasan said.
Speaking about the telecom tower erection business under Sterling Projects and Engineering Ltd, Srinivasan said: “We formed the company mainly to do work for Tata Telecom. We may also look at other telecom companies.”