11 July 2007 10:57 [Source: ICIS news]
By Jeanne Lim?xml:namespace>
SINGAPORE (ICIS news)--Malaysian biodiesel producer Nexfuel plans to build a 50,000 tonne/year bioethanol plant in Kulim, Kedah state, early next year but denies this latest venture is a reaction to soaring crude palm oil costs (CPO) in the region, a company executive said on Wednesday.
The company sees big potential for bioethanol as it was a petrol substitute, director Looi Kem Loong told ICIS news. Moreover, it would use cassava, a quick yielding feedstock where the harvest could be as short as eight months compared with five years or so for palm trees, he added.
The company had decided on the project before CPO prices increased, he said, adding Nexfuel believed opportunities for both biofuels still remained.
“Though CPO prices have increased, pushing down margins for biodiesel, alternative feedstocks such as jatropha, cotton seed oil, where pricing is lower and more stable, are being introduced. Thus, we believe biodiesel is here to stay,” he said.
Nexfuel planned to start up the plant in Kulim at the end of 2008, said Looi, adding the firm was currently looking for a technology provider in the ?xml:namespace>
“The final costs of the plant are difficult to ascertain until we get the technology provider,” he said.
Nexfuel might be headed in the right direction as prices of CPO at the moment were too high for biodiesel to be of any value, one industry analyst said.
However, “bioethanol is still viable at the moment - we expect to see projects coming in [from] southeast Asia”, said Chris de Lavigne, global vice president of consulting at Frost & Sullivan.
There is already a good export market for bioethanol, he said, adding that countries like
Meanwhile, Nexfuel, which is part of Malaysian biofuel incubator Asia Bioenergy Research and a joint venture with some unspecified local partners, was currently in advanced discussions with several buyers in
The company would also produce fertilizer as a by-product at the Kulim plant, totalling about 5-10% of bioethanol output, he said.
The company will begin sourcing cassava feedstock from
Asia Bioenergy Group’s biofuel interests run the gamut, from biodiesel and bioethanol to anxilliary support activities.
Nexfuel received approval for the bioethanol project from
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