Presscane Ltd
=============

PressCane Limited is an ethanol distillery which is a subsidiary of the conglomerate Press Corporation Limited and began operations in June 2004. The plant is located in Chikwawa on the east bank of the Shire River about 25 km north of Nchalo (55km south of Blantyre) and employs 112 Malawians including management.

The main products of the distillery are fuel ethanol also known as anhydrous alcohol (AA 99.8% v/v) and industrial alcohol (rectified spirit 96.5% v/v). Sugar cane molasses are procured from Illovo in Nchalo and fermented into ethanol. The high quality of the ethanol is possible due to the new molecular sieve dehydration (MSDH) technology installed in the distillery. The molasses are a waste material (effluent) for the Illovo Sugar Mill whose environmental disposal issues have been solved by the establishment of PressCane Limited.

The fuel ethanol is blended with petrol in the ratio 10% ethanol to 90% petrol by the petroleum companies such as BP Malawi, TOTAL Malawi and CHEVRON Malawi. Fuel blending in Malawi (and indeed elsewhere) was precipitated by the energy crisis in the early 1970s. Today fuel blending is mostly driven by:

*  Environmental clean air issues and
*  The recognized rapid depletion of the traditional fossil fuels and thence the necessity of renewable energy sources.

There are further considerations which apply to Malawi such as the need to save on forex.

The surplus ethanol after national blending requirements have been met is exported thus generating forex for Malawi.

Annual Report - 2004
The Company turned in poor results for the period under review. The commissioning of the plant which should have taken place in January 2004 was delayed to June 2004 because of litigations. Other factors which contributed to the poor results include inadequate feed stocks, erratic and unreliable coal supplies, inadequate storage facilities for finished product and low margins on export sales.

Measures are in hand to increase the storage capacity for finished product. Simultaneously negotiations are taking place with regard to the possibility of economically sourcing additional feed stocks from sugar mills in neighboring countries. The export market is unpredictable but it is hoped that if the company can bypass middlemen and deal with principal traders themselves, the margin would improve significantly.

Annual Report - 2005
The Company has reported poor results. Some of the problems which resulted in a stop-and-go running of the factory during the previous year continued to a lesser extent.

Although operationally the Company performed better than budget, compliance with International Accounting Standard 16 necessitated the revaluation of plant and other assets. This resulted in an impairment loss of MK348 million. This coupled with litigation expenses, finance charges, exchange losses and payment of withholding tax not previously recovered from payments to the main civil works contractor, contributed to the poor results.

It is anticipated hat future performance will improve as the problem of the size of the local market is likely to be resolved by the identification of a substantial and sustainable export market for the Company's products.



Go Back