UNTUNG MURDIYATMO, Ph.D.•Chairman

•Indonesian Ethanol Association

(ASENDO)

Indonesian BioEthanol Industry:Curent Condition &

Opportunity for Development

1. Indonesian Sugarcane Industry

2. Indonesian Ethanol Industry

3. Opportunity for BioethanolDevelpment

Profile of Sugarcane Industry, Indonesia

1. Number of Company : 17

2. Number of Mills : 63 unitsBUMN (State Owned) : 51 units BUMS (Private) : 12 units

3. Total Crushing capacity : 255,000 TCD

4. Crushing period : 130 ~ 180 days/year

5. Area : 472,700 haPrivate Company : 176,200 haFarmer & State Owned : 296,500 ha

6. Cane production : 32 ~ 35 Million Ton

7. Average Cane productivity : 70 ~ 85 Ton/Ha

8. ................. 3

8. Sugar production : 2.2 ~ 2.7 million ton

9. Sugar productivity : 5 ~ 7 ton/ha

10. Average rendement : 6 ~ 9 %

11. Molasses production : 1.3 ~ 1.5 million ton

12. Bagasse : 8.2 ~ 10 million ton

4

JAVA :Company/No. of Mill

Area, Ha Production, Ton

PTP Nusantara IX /8 32,024 1,954,703 PTP Nusantara X / 10 72,435 6,110,957 PTP Nusantara XI / 16 89,687 5,637,041 PT RNI I / 3 29,108 2,522,465 PT RNI II / 5 23,223 1,330,115 PG CandiBaru / 1 4,897 416,267 PT Madubaru/ 1 7,500 509,521 PT KebonAgung / 2 38,476 2,760,940 PT IGN / 1 1,501 135,118 PT LPI (PG Pakis Baru)/1 6,386 450,528 PT Gendhis Multi Manis/1

1,830 129,377

Total State Owned,Jawa 251,374 17,971,547 Total Private Co,Jawa 55,693 3,985,484 TOTAL, JAVA 307,067 21,957,031

SUGARCANE PRODUCTION in JAVA, 2014

OUTSIDE JAVACompany/ No. Of Mill

Area, Ha Production, Ton

PTP Nusantara II / 2 8,460 478,599 PTP Nusantara VII / 2 25,499 1,764,069 PTP Nusantara XIV / 3 11,116 430,145 PT GunungMadu Plantation /1 27,651 2,307,980 PT GulaPutihMataram/1 22,693 1,598,295 PT Sweet Indo Lampung/1 21,651 1,521,865 PT Indolampung Perkasa/1 18,425 1,446,006 PT PG Gorontalo/1 7,301 493,331 PT PSMI/1 11,750 988,000 PT LPI (PG Komering)/ 1 11,064 701,481

State-Owned, Outside Java 45,075 2,672,813 Private Co, Outside Java 120,534 9,056,958 Total, Outside Java 165,609 11,729,771 State-Owned, Indonesia 296,449 20,644,360 Private Co, Indonesia 176,227 13,042,441 TOTAL INDONESIA 472,676 33,686,801

Sugarcane Production in Outside Java & Indonesia, 2014

sugarcane Molasses

2005 382.4 31,132.8 1,313.9

2006 395.9 30,232.8 1,424.4

2007 426.7 33,293.5 1,604.3

2008 435.9 34,351.5 1,491.5

2009 416.3 30,248.2 1,354.6

2010 431.2 35,322.1 1,571.3

2011 432.8 28,856.7 1,370.0

2012 442.5 31,888.9 1,570.0

2013 472.8 35,609.6 1,594.2

year Area (000 Ha)Production ( * 1000 ton)

SUGARCANE & MOLASSES PRODUCTION

6

Source: AGI

2014 472.7 33,686.8 1,508.2

USE of MOLASSES

• Production ~1,500,000 Ton

• Utilization

1. MSG/Amino Acid ~ 500,000 Ton

2. Export ~ 350,000 – 550,000 Ton

3. Ethanol Industry ~ 500,000 – 600,000 Ton

Molasses Export

Year Amount (Ton)

200620072008200920102011

524,896389,392866,714466,403458,767522,487

Source : BPS, 2012

Demand-Supply Map of Molasses (2010)

PROVINCE Number of Sugarmill / Molasses production

Number of User / Molasses demand Balance (+/-)

JAVA ISLAND- West Java

- Central Java

- Yogyakarta

- East Java

- TOTAL, JAVA

OUTSIDE JAVA. North Sumatera

.Lampung & South Sumatera

.South Sulawesi

-Gorontalo

TOTAL, OUTSIDE JAVA

5 Mill/ 89.881 ton

10 Mill/ 148.202 ton

1 Mill/ 20.937 ton

28 Mill/ 785.263 ton

42 Mill/ 1.044.283 ton

2 Mill / 27.320 ton

7 Mills/ 387.611 ton

3 Mill / 18.244 ton

1 Mill / 18.000 ton

12 Mill/ 451.180 ton

Ethanol 2 / 49.000 ton

Ethanol 1 / 180.000 ton

Ethanol 1 / 21.000 ton

MSG 5 / 525.000 tonEthanol 3 / 255.000 ton

12 User/ 1.034.000 ton

Ethanol 2 / 20.000 ton

Ethanol 2 / 183.000 ton

Ethanol 1 / 15.000 ton

0 / 0

5 User / 218.000 ton

+ 40.881 ton

-31.798 ton

+ /- 0 ton

+ 5.263 ton

+ 14.346 ton

+ 7.320 ton

+ 204.611 ton

+ 3.244 ton

+ 18.000 ton

+ 233.180 ton

2009 : Java Balance : devisit 167.000 ton MSG = MonoSodium GlutamateOutside Java Balance : surplus 300.000 ton

AVERAGE MOLASSES PRICE2009-2011

Jan Feb Mar April Mei Juni Juli Agust Sept Okt Nop Des

2009 Rata2 83,00 92,25 119,50 108,25 127,50 127,50 139,00 142,75 147,25 152,00 137,56 137,56

2010 Rata2 160,00 142,50 125,00 169,75 150,50 120,30 126,00 127,25 155,00 154,60 170,00 165,00

2011 Rata2 120,00 142,00 100,00 106,08 107,75 84,75 83,05 72,50 72,80 79,00 82,00 98,00

0,00

20,00

40,00

60,00

80,00

100,00

120,00

140,00

160,00

180,00

US$/Ton

11

Fluctuation of DOMESTIC Molasses Price

Year Average price

2004

2005

2006

2007

2008

2009

2010

2011

Rp. 413,-/kg

Rp. 614,/kg

Rp. 656,-/kg

Rp. 550,-/kg

Rp. 589,-/kg

Rp. 1.342,-/kg

US$ 115 – 203/ton

US$ 70 – 90/ton

Indonesian Ethanol Industry,Current condition

Sugarcane Molasses & Sugar

Ethanol 1st Gen

SUGARCANE

Most Ethanol Distillery in Indonesia use Cane Mollases as Feedstock

Existing Ethanol Plants (cane molasses based)

Company Annual capacity (KL/Y) Plant locationMolindo Raya Industrial 50,000 Malang. East JavaPASA Djatiroto*** 7,000 Lumajang, East JavaEtanol Ceria Abadi 12,000 Jombang, East JavaENERO 30,000 Mojokerto, East Java

Indo Acidatama 45,000 Solo, Central JavaMadu Baru **** 7,000 Yogyakarta

PSA Palimanan *** 7 000 Cirebon, West JavaJapura Sarana** 6 000 Cirebon, West Java

Indo Lampung Distillery 60 000 LampungPermata Sakti* 5 000 Medan, North SumateraMolasindo 3 600 Medan, North SumateraBasis Indah 5 000 Makasar, South Sulawesi

• *Closed since 2007; ** Closed since 2010; *** Closed since 2013• ****New Dehydration Plant has been installed in 2014

Newly Operated Ethanol Plants (CassavaBased)

• COMPANY ANNUAL CAPACITY LOCATION

• Medco Ethanol 60,000 Kl Lampung• Indonesia Ethanol 50,000 Kl Lampung

Industri (IEI)

• PT. Medco Ethanol : start operation (2009/2010) using cassava; and since 2012 use molasses and cassava as feedstock

• PT. Indonesia Ethanol Industry : start operation (2011) using cassava (fresh and chips)

Demand of FGE (Fuel Grade Ethanol)

• Estimated Gasoline consumption 2015 : ~ 24 Million KL

• Demand of FGE at 1% Mix = 240,000 KL/Y

• Demand of FGE at 5% Mix = 1,200,000 KL/Y

• Existing Capacity of FGE = 100,000 KL/Y ( From three

Distilleries) by 2014.

Big Opportunity for Development of New Fuel Grade Ethanol Plant

Opportunity to develop new Ethanol Plant based on Sugarcane is also in line with the President Jokowi’s policy related to “Food & Energy Security & Independence”

In 5 years time, the Government plans to build 10 New Sugarcane-based (10,000 TCD, each) Integrated Industry, producing “Sugar-Ethanol/Electricity”

Opportunity to develop a new & competitive Fuel Ethanol Plant will need:

• Land for Sugarcane Extention

• New OnFarmTechnology :- New High Biomass Sugarcane Varieties- Best Management Practices : best seedlings, good

mechanization, sufficient fertilizing & water, etc

Province For Intensification For Extensification Total

AcehNorth SumatraRiauSouth SumatraLampungEast JavaSouth KalimantanCenter KalimantanSouth SulawesiWest Nusa TenggaraMalukuPapua

Total

1,00036,300

043,00046,50014,100

6,0000

28,900000

175,800 Ha

169,50096,800

166,000931,000440,500

1,798,300338,000849,000

26,9008,100

166,8001449.000

6,439,900 Ha 6,615,700 Ha

Land suitable for Sugarcane in 12 Provinces

Source : Jurnal Litbang Pertanian, 27(1): 2008

Based on this Data, availability of suitable Land for sugarcane extention is more than enough.....But still not enough without the support of New High Yielding Sugarcane varieties

NEED the BEST ON-FARM TECHNOLOGY

• High yielding sugarcane varieties• High Pol sugarcane variety• Best seedlings• Good mechanization in soil preparation• Sufficient fertilizers and irrigation

Example of Seedling Technology of Sugarcane :• Pure variety• Clean from pest & disease• High tillering

Application of Best Management On-farm PracticesWill easily produce >100 Ton Cane/Ha

DEVELOPMENT of NEW HIGH YIELDING SUGARCANE VARIETIES IS NECESSARY for COMPETITIVE BIOETHANOL INDUSTRY

Breeding Technology of Sugarcane To provide continuous need of New Varieties

Learning from other countriesSUGARCANE RESEARCH & DEVELOPMENT

• In all-over the world believe that SUGARCANE is one of the most efficient plant in absorbing solar energy, then converting it into SUGAR & BIOMASS

• AGRI-BIOTECH Companies collaborate with RESEARCH ORGANIZATIONS / UNIV racing to produce HIGH SUGAR /BIOMASS CANE

Syngenta Starts Research Partnership in

Australia for Sugarcane Biomass Conversion to Biofuels

By: Syngenta via PR NewswirePosted on October 22, 2007 at 00:00 AM EDT

BASEL, Switzerland and BRISBANE, Australia, Oct. 22 /PRNewswire/

•Syngenta announced today that it has agreed a researchpartnership in Australia that focuses on the development of costeffective conversion of sugarcane bagasse to biofuels, includingthe delivery of plant-expressed enzymes. The research partnersare the Queensland University of Technology (QUT), itstechnology transfer and commercialization company qutblueboxand the Australian agbiotech company Farmacule BioIndustries. Anew Syngenta Centre for Sugarcane Biofuel Development will beestablished at QUT's campus in Brisbane, Australia

•Under the collaboration agreement Syngenta will have exclusive globalmarketing rights for the products, excluding for Australia, New Zealand andPacific islands, where rights are held by the other project partners.Syngenta can also use the developed technologies in other crops. TheSyngenta Centre for Sugarcane Biofuel Development will commenceoperations immediately.in Brisbane, Australia.

ASAHI – OKINAWA SUGARCANE RESEARCH” in Japan: has been successful to yield HIGH BIOMASS CANE (2006)

•estimated DRY MATTERS yield: 37.4 tons per hectare - processed into: 7.1 tons of sugar, 4300 liters of ethanol and 24 tons of bagasse

•conventional cane: 17.4 tons per hectare - processed into: 6.9 tons of sugar, 1400 liters of ethanol production, 7.8 tons of bagasse

•new cane yields three times as much bagasse, which is burned to generate the energy to run a sugar-ethanol plant; large amount of

excess electricity can be fed into the grid

•excess biomass (leaves, non-crushed stalks) to be mixed with manure used as organic fertilizer

Joint Press ReleaseAugust 4, 2009

CTC – Centro de Tecnologia Canavieira – and BASF enter technical cooperation agreement in sugarcane

German-based BASF and Brazilian research center enter cooperation in plant biotechnology

Focus on development of genetically modified sugarcane varieties for the Brazilian market with drought tolerance and 25 percent

higher yields

Piracicaba (SP, Brazil), August 4, 2009 –CTC – Centro de Tecnologia Canavieira-Brazil & BASF announced

today a cooperation agreement in plant biotechnology. The companies are combining their competencies in sugarcane breeding

and biotechnology with the aim of bringing sugarcane growers higher-yielding and drought-tolerant sugarcane varieties. The goal is to bring sugarcane varieties with yield increases of 25 percent to the market within about the next decade. This would result in an almost

unprecedented jump in productivity for any crop.

PCR of 6 Transgenic Sugarcane Lines

- 1 and 11: Lambda HindIII/EcoRI marker

- 2 and 3: Transgenic lines E1 and E11 carrying betA from E.coli

- 4,5 and 6 : Non transgenic varieties (BL, CF and JT)

- 7,8,9 and 10 : Transgenic lines BL-T6, BL-T7, CF-T11 dan JT-T2 carrying betA from R. meliloti

- 12 : plasmid pMLHR2113

- 13 : plasmid pMLHE2113

Variety Origin of betA Transgenic

line

CDH

activity

Betaine

content

BL

CF1426

JT26

R.meliloti

R.meliloti

R.eliloti

E. coli

E.Coli

R.meliloti

BL-T6

BL-T7

BL-T11

CF1426-T1

CF1426-T11

JT26-T4

224.6 Units

848.0 Units

195.2 Units

566.8 Units

636.6 Units

186,4 Unit

180.8 ppm

312.4 ppm

231.6 ppm

308.6 ppm

387.8 ppm

101.0 ppm

Table 1. CDH activity and betaine content in leaves of 3 month old

transgenic sugarcane lines.

Transgenic Control

Day 29 ,without watering

We have to learn From Brazil to developSugarcane-Based Ethanol Plant

DEVELOPMENT of

2nd Generation BioEthanol

From Sugarcane Bagasse

Opportunity to develop 2G-BioEthanol from excess bagasse of Sugarcane

• One Sugar Mill with cap. Of 10,000 TCD generates Excess Bagasse of 3,000 Ton/Day or 540,000 T/Y• 10 New Sugar Mills 5,400,000 T/Y containing 2,700,000 T/Y dry cellulosic materials equivalent to 54 million Liters of 2G-Ethanol

1G-Bioethanol from 1 Sugar Mill of 10,000 TCD 72 Million Liters/Y 720 Million Liter/Y from 10 New Developed Sugar Mills

1G & 2G-BioEthanol from 10 New Sugar Mills 774,000,000 L/y

Transportation of Sago log to the FactorySago as potential feedstock for Bioethanol development:

• already available in large area (> 1 Million Hectares in Papua)

• Solid waste from Sago starchfactories are still not utilized

Solid waste of Sago

In addition to Bagasse from Sugar Mills, Indonesia still have a huge potential from Sago Palm

EnzymeProcess

Ferment-able Sugars

Fermentation

1G & 2G Bioethanol

Enzyme Process

SugarcaneBagasse

Sago Waste

2G-Bioethanol

PretreatmentProcess

PretreatmentProcess

CONCLUDING REMARKS

1. The installed capacity of Bioethanol production ~ 350,000 KL/Y , including the 100,000 KL Fuel Grade Ethanol (FGE)

2. The Demand of Bioethanol for Gasoline Mix at 5%mix is about 1,200,000 KL/Y ....far beyond the existing capacity; however this will need strong Government policy to be implemented.

3. Opportunity to Develop a New Ethanol Plant is promising.

4. Suitable land for extention of sugarcane is available; however this need a strong Government support to attract the Investor.

5. Opportunity to develop BioEthanol Industry will need the Support of Technology especially for Development of High Yielding Sugarcane Varieties, as well as the Support of Technology of Second Generation Ethanol from Sugarcane Bagasse.