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U.P.: New factories to have alcohol distillation capacity of 1.45 bl

With the rising sugarcane production and molasses, Uttar Pradesh has received investment to the tune of over Rs 5,400 crore in 31 Greenfield alcohol distillation plants across the state in the private and cooperative sector.

The new factories will have a combined alcohol distillation capacity of 1.45 billion litres (bl), according to Additional Chief Secretary (Sugar and Excise) Sanjay Bhoosreddy. So far, 18 of these plants with a total alcohol capacity of 968 million litres have already started commercial production.

The production of ethanol, also produced from molasses, has hit the billion-litre mark and is counting in the current sugarcane crushing season (2022-23). At present, the sugarcane area and sugarcane output are estimated at 2.85 million hectares and 235 MT, respectively.

Ethanol produced in the state is exported to oil marketing company depots, both within and outside the state, for the Centre mandated 10% blending in fuel.

“These Greenfield distillation plants will generate fresh employment for 8,267 people. In fact, more than 5,000 youths have already been employed, and an investment of Rs 3,530 crore has been injected into the proposed projects,” Bhoosreddy said.

He said the state government has been ramping up capacity in different manufacturing domains to cater to the domestic demand and also export to other states. The alcohol sector is directly linked with the sugarcane and ethanol value chain, thus benefiting the agricultural roadmap.

“The existing UP distilleries (38 in number) have also increased their installed capacity by 592 million litres during the last four years,” Bhoosreddy said, adding that UP now has a consolidated alcohol production capacity of more than 3 billion litres annually.

Bhoosreddy said that the Excise department is facilitating new wineries to provide quality and legitimate leisure drinks to the state consumers.

Since UP is among major horticultural producers in nutritious crops such as mango, peach, etc, the wineries value chain will benefit state farmers, increase rural incomes, create local jobs and catalyse the food processing industry.

“The state has liberalised norms and simplified rules to further enhance the ‘ease of doing business’ matrix and attract private sector investment. The sustained efforts have borne fruits and UP has witnessed the setting up of a large number of distilleries, microbreweries, sanitiser units, etc between July 2019 and March 2023,” he underlined.

Alcohol is widely used in a variety of industrial products, including liquor, cosmetics, and pharmaceutical industries. At the same time, the state government is also promoting the setting up of microbreweries to boost the hotel and travel sector. In the last four years alone, five new breweries have been established in the state with a total investment basket of Rs 363 crore.

UP is the country’s biggest ethanol producer. A sugar by-product, ethanol is used for a variety of purposes ranging from mixing in fossil fuel to pharmaceutical and chemical industries. The state has about 85 operational ethanol distilleries, while the annual capacity is estimated at 2.45 billion litres.

Sources say the UP distilleries have already received ethanol orders to the tune of 1.58 billion litres, thereby implying that the seasonal production will match the same and go further up based on prospective orders.

The above news was originally posted on

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