Australia-listed OGL mulls biodiesel options

09 July 2007 09:08  [Source: ICIS news]

SINGAPORE (ICIS news)--Overseas & General Ltd (OGL) is evaluating its options after shareholders voted down a plan to build a large-scale biodiesel plant in Indonesia, a company official said on Monday.

“We may re-enter the market at an appropriate time,” Leong Kian Ming, OGL’s executive director said.

The Australia-listed and Malaysia-based company, which has formed a 51:49 joint venture with Mega Pacific Investment, had signed all the necessary agreements to build a 400,000 tonne/year biodiesel plant at the port of Dumai, west Sumatra.

Land clearing at the site was supposed to take place next month and the plant could be operational in 18 months, Leong said.

But the $57m-59m (€41.6m-43.1m) project was voted down by shareholders at end-May after crude palm oil (CPO) feedstock prices, which constitute more than 80% of production costs, peaked at $830/tonne before settling at slightly above $687/tonne.

“This potential loss of margins is so severe as to threaten the project viability itself even if the CPO price remains at this level,” the company said in a statement to its shareholders before the vote.

OGL’s primary activities are in plantation management of tropical hardwoods in Fiji Islands, vocational education and training in Australia, and in the sale of clonally propagated seedlings in Malaysia, Papua New Guinea and Fiji Islands.

($1=€0.73)

By: Florence Tan
+65 6780 4359

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