SOURCE OF GREEN

Colombia 2013 | AGRICULTURE | INTERVIEW

TBY talks to Mauricio Iragorri, General Manager of Mayagüez, on the potential of biofuel production and exports.

Mauricio Iragorri
BIOGRAPHY
Mauricio Iragorri was born in Cali and graduated from the Colegio Colombo Británico before receiving his MBA from the Georgia Institute of Technology. He has worked for Mayagüez for 25 years. He started as a Sugar Production Plant Engineer and has been continuously promoted until becoming General Manager in 1999.

How has Mayagüez evolved since it was established in 1937?

We started in the sugar production segment; however, 10 years ago, we decided to shift business activities and look to expand our business line in the energy sector. In 2006, we set up an ethanol plant that today produces up to 250,000 liters of ethanol per day. Annually, we can produce 80 million liters. In this context, we are a very innovative company that recycles vinasse and re-circulates it into the system rather than dumping it on the land, which might contaminate the soil and water reserves underground. In addition, our storage and delivery system is regulated by the National Fire Protections Association (NFPA) and ASTM International standards and ensures efficiency and reliability in our operations. Today, in Colombia, the mix of ethanol with gasoline is 8%. In addition to ethanol, in 2010, we set up a cogeneration plant that has an installed capacity of 37 MW per hour per day. We sell around 19.5 MW per hour to the grid, and the remaining is consumed internally.

This is a company that has achieved sustainable growth through renewable energy production. What is the potential for investment in the biofuels sector in Colombia?

The sector holds huge potential, because there are only five sugar-based production companies, but there is capacity to construct five to seven more. The thing is there is no clear indication on what can happen with the price of ethanol, and that is the reason why some companies have halted projects in the sector. Additionally, many sugar production plants prefer to export sugar rather than devote their product to manufacture ethanol. For example, the Cauca Valley has the potential to produce 200 MW of electricity from bagasse, and several players in the industry are working together to achieve such a capacity. Mayagüez is one of the largest producers of energy in the region, but many other companies have boosted investment in the industry. We will see important events in the near future.

How would you assess the state of development of the sugar industry in Colombia?

There are around 13 operating mills in Colombia and thousands of stakeholders involved in this particular segment of the industry. For example, out of the 230,000 sugar-cultivated hectares in the Cauca Valley, only 25% is from the sugar mills, whereas the remaining 75% comes from non-related producers. Colombia is among the top-three sugar producers in Latin America, and today the country devotes 320,000 tons of sugar to the production of ethanol. Currently, 42% of the sugar we produce is devoted to the domestic consumption market, 23% goes to exports, whereas the remaining 35% is for ethanol production

What are some other of the strategic plans for Mayagüez?

We decided to expand operations into two or three countries in the region, and our financial projections foresee an investment capacity of up to $150 million. In this context, the future of the ethanol industry will be very much related to fibers, and although the technology developed is still very expensive, we are currently looking into future options to start producing ethanol from fibers. Finally, we will invest in more storage and distribution facilities, machinery, and new technologies, which currently represent 47% of our investment portfolio.

The company recently changed its image. What was the strategy behind this?

The move was envisaged to strengthen our position in the market and make sure that the market saw our shift toward energy production business activities. The logo and colors chosen are aimed at showing the market that we are a serious and solid company, and that we have high levels of environmental responsibility, which play a very important role in our activity. I always say that one can be profitable and respect the environment at the same time. For example, we currently use less than half the amount of water we did in terms of irrigation 10 years ago. In terms of social responsibility, we are highly committed in terms of educational programs; we have had our own school since 1954 with over 1,000 students, which has nationally certified programs. We make annual investments of around $2 million, and we plan to construct a new education facility in the Pradera community with a kindergarten, a public library, a school, and public facilities.