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 Global concern for the environment and future of fossil fuels, signing of international agreements such as Kyoto Protocol and global oil prices are factors leading to investment in renewable energy production and diversification into energy production. Dynamics of the sugar industry are changing irrevocably, with increasing importance of cane as feedstock for ethanol. 

Global ethanol and bio-fuels production is forecasted to expand. The demand and profitability of ethanol is being influenced by the growth of flexi-fuel cars. This is particularly evident in Brazil. 

Kenya sugar industry and specifically Mumias Sugar Company is ideally positioned and has taken advantage of the concept of bio-refinery or integrated sugar production which utilises the entire crop for a variety of environmentally favourable outcomes. Effective use of by-products in an integrated sugar plant diversifies the income stream by adding new intermediate-value and high-value products. Efficient utilization of by-products of the sugar industry provides a significant impact on the profitability of sugar industry. 

The limited crude oil supplies, refining capacity, and rising concern over environmental degradation, presents a unique opportunity for Mumias Sugar Company to diversify its product range. With this in mind, Mumias Sugar Company has built a distillery plant with the capacity to produce 22M litres of ethanol annually The annual production estimates suggest that ethanol production will not displace the sugar production but it will utilize the molasses output. 

The Ethanol project produces extra neutral spirit which is used for alcohol production and Technical alcohol (Ta) which is for industrial use. 

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