Companies leveraging both sugar and grain to lead India’s ethanol growth: Athar Shahab, Zuari Industries

The grain-based ethanol has the potential to enhance India’s energy security and assist the government in achieve its long-term ethanol blending objectives, says Athar Shahab, Managing Director (MD), Zuari Industries. However, he emphasises that clear policies regarding pricing, procurement, and subsidies are essential for this.In an interaction with ET Digital, Shahab explains why India’s next growth wave in the ethanol economy will come from companies adept at navigating both sugar and grain ecosystems, driven by effective execution and encouraging policies. Additionally, Shahab points out that delays in revising ethanol procurement prices will impact industry viability, highlighting the need for a stable, forward-looking policy environment to support long-term investments and growth in the sector. Edited excerpts:

The Economic Times (ET): How has Zuari Industries evolved from a fertiliser company into a diversified conglomerate?
Athar Shahab (AS): Zuari’s journey began in 1967 with the establishment of Zuari Agro Chemicals Limited in Goa. Over the past 58 years, we have transformed from a fertiliser-focused company into a dynamic, multi-sector conglomerate that contributes meaningfully to India’s industrial and economic growth. Today, Zuari Industries Limited (ZIL) is the flagship company of Adventz, with a presence across sugar, power & ethanol (SPE), real estate, engineering & construction, and financial and management services.

Our portfolio includes strategic investments in Zuari Agro Chemicals, Mangalore Chemicals & Fertilizers, Chambal Fertilisers and Chemicals, Texmaco Rail & Engineering, and Texmaco Infrastructure & Holdings. The core operating business of Zuari Industries is our SPE division, comprising a 10,000 TCD (tonnes of cane per day) sugar crushing unit, a 125 KLPD (kilolites per day) distillery, and a 40.85 MW cogeneration plant. Our largest subsidiary, Zuari Infraworld India, has delivered premium residential projects in Mysuru and Goa and is currently developing St. Regis Residences—an ultra-luxury tower—on Financial Centre Road, Dubai.

Live Events

Our bioethanol joint venture, Zuari Envien Bioenergy Pvt. Ltd, with Envien International of Slovakia, is constructing a 180 KLPD grain-based bioethanol distillery, slated for commissioning in September 2025. Simon India Ltd, our EPCM arm, provides engineering, procurement, construction management, and energy transition services across sectors, including chemicals, fertilisers, oil & gas, petrochemicals, and green hydrogen. Through Zuari Finserv and Zuari Insurance Brokers, we provide stockbroking, financial product distribution, and insurance advisory services. Zuari Management Services is evolving into a digital-first consulting platform.

ET: What is the strategy that Zuari implements to capitalise on opportunities in ethanol production, renewable energy, and agri-inputs?
AS: Zuari is a committed participant in India’s energy transition. Through Zuari Envien Bioenergy, we plan to expand to a 1,000 KLPD ethanol platform, reinforcing our role in the country’s green energy ecosystem. Our renewable energy strategy leverages bagasse-based cogeneration, with potential for compressed biogas generation.In the agri-input space, Zuari FarmHub continues to introduce innovative, sustainable solutions to improve farm productivity and soil health, reaffirming our commitment to rural development and agri-value chains.

ET: What impact does the shift toward grain-based ethanol production have on the sugar industry and the broader biofuel ecosystem?
AS: The transition to grain-based ethanol represents a structural evolution in India’s biofuel strategy, offering greater feedstock flexibility and opening new growth avenues for integrated agri-energy businesses. For the sugar industry, this diversification helps de-risk ethanol revenues from sugarcane price volatility and cyclicality. It allows forward-looking sugar mills to evolve into multi-feedstock bio-refineries—more agile, resilient, and capable of capitalising on shifting market dynamics. However, this transition demands fresh capital investment in plant and machinery, storage, processing, and procurement infrastructure, as well as more sophisticated supply chain management.

From a macro perspective, grain-based ethanol strengthens India’s energy security and supports the government’s long-term ethanol blending targets. However, it also introduces new variables, especially around food availability and inflation. Policy clarity on pricing, procurement mechanisms, and subsidies will be key to ensuring the economic viability of this shift. For investors, this transition offers significant upside, particularly for players who can build scale, secure diversified raw material supply chains, and operate efficiently. The next wave of growth in India’s ethanol economy will come from companies that can straddle both sugar and grain ecosystems, backed by sound execution and policy tailwinds.

ET: What potential impact could the proposed US-India bilateral trade agreement have on India’s ethanol industry?
AS: India currently prohibits ethanol imports for fuel blending, and it is vital to maintain this policy to safeguard and nurture the fledgling domestic industry. Bioethanol is central to India’s energy self-reliance strategy, reducing dependency on imported fossil fuels.

The viability of ongoing and future investments hinges on policy stability. Encouraging domestic production through a protective regulatory framework is essential to sustaining this critical sector.

ET: How is Zuari Industries navigating evolving government policies, and what major policy shifts could impact the ethanol industry?
AS: We continuously align our strategic roadmap with government policy developments, particularly in the SPE segment. The national push for ethanol blending and renewable energy has driven our capacity expansion and investment in cogeneration power.

However, the volatility in sugarcane minimum support price (MSP), quota regulations, and abrupt tariff changes for bagasse-based power pose real risks. Additionally, delays in revising ethanol procurement prices directly affect industry viability. We advocate for a stable, forward-looking policy environment to enable long-term investments and sectoral growth.

ET: What is your strategy for balancing growth with sustainability, especially in capital-intensive sectors like energy and agriculture?
AS: Sustainability is deeply embedded in our business strategy. In the SPE division, we operate a 40.85 MW cogeneration plant powered by bagasse—a circular energy model that reduces emissions while enhancing process efficiency. The plant supplies nearly 22 MW of power to the Uttar Pradesh grid, showcasing our contribution to the green energy transition.

We have adopted zero-effluent systems and waste-to-energy solutions with a primary focus on water conservation and community engagement. In real estate, our projects incorporate green building practices, and we prioritise environmental stewardship in township planning.

[ad_1]

_{Images are for reference only.Images and contents gathered automatic from google or 3rd party sources.All rights on the images and contents are with their legal original owners.}

[ad_2]