Lereno banks on biodiesel quality to differentiate

05 February 2007 10:39  [Source: ICIS news]

By Jeanne Lim

KUALA LUMPUR (ICIS news)--Malaysia's Lereno is banking on the quality of its biodiesel to differentiate itself from competitors, a senior company official said on Monday.

There are more than 80 companies which have been granted licenses by the Malaysian Industrial Development Authority (MIDA) to produce biodiesel.

Lereno planned to start up a $100m, 60,000 tonne/year project by May and is in discussions with a Singapore company to build a second unit. Plans for the second unit have yet to be finalised, the official said.

"We're medium-sized. But in terms of product differentiation, our quality is much better," said Daniel Ho, one of the company's founders.

He pointed out that while big palm oil players like Wilmar and the upcoming Synergy Drive group of companies tend to compete on price with their biodiesel product, Lereno is focussing one being a niche player.

"We want to remain niche and specialised. As far as we know, we’re the only one which can do winterisation," he said.

The company planned to export its product directly to oil majors in Europe, and its winterisation technology prevents the biofuel from coagulating at 16 degrees Centigrade.

Its product also complies with strict European Union standards for biodiesel, he said, adding that the company had spent five years on research and development.

Ho explained that this enables the company to reap better margins as it allows the company to cut out middlemen who do the blending and diluting of the biodiesel.

In the process, Lereno is able to offer its biodiesel at more attractive prices, he said.

By: Jeanne Lim
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