Determining the feasibility of selected alternative products co-produced from sugarcane

Abstract

Co-production of alternative products with sugar from sugarcane is an absolute necessity to ensure the survival and secure the future of a struggling South African sugar industry. This study investigates the feasibility of various possible products for co-production. It utilises techno-economic analyses conducted by others and subjects production scenarios to costbenefit analyses. In doing this, all production scenarios are compared in the current post- COVID-19 economic climate. Each production scenario's internal rate of returns and net present values are calculated and compared during the cost-benefit analyses. These empirical calculations suggest that production scenarios for specific plant configurations are viable. It also found that some initially feasible scenarios are no longer feasible given the current economic environment and increased cost of capital required to fund the construction. Lower product selling prices also led to the elimination of once-feasible production scenarios. Specific production scenarios for co-products levulinic acid, succinic acid and furfural were found to be viable. This is based on the superior IRR and NPV values these products returned in the cost-benefit analyses. For the production scenario, producing levulinic acid only, decreasing its selling price by 40%, still maintained a feasible production scenario with an IRR of 18% and an NPV of US$ 109.50 million. For the production scenario, producing succinic acid only, decreasing its selling by 25%, still maintained a feasible production scenario with an IRR of 21% and an NPV of US$ 224.52 million. For the production scenario, co-producing levulinic acid and furfural, a reduction in both products' selling price by 50% still provided an IRR of 21% and an NPV of US$ 391.91 million. These findings are encouraging and require investors, sugar milling companies and entrepreneurs to plan and execute projects to construct add-on facilities to existing sugar mills wherein these products can be co-produced with sugar. Co-production of these products will ensure that the sugar industry survives and solidifies its future.