S Africa's RNRF starts work on $183m biodiesel unit

24 March 2008 07:46  [Source: ICIS news]

SINGAPORE (ICIS news)--South Africa-based Rainbow Nation Renewable Fuels (RNRF)’s rand (R)1.5bn ($183m) soyabean processing facility will allocate 20% of its soyabean oil output for biodiesel, but this will be dictated by prices, a senior official at its Australia-based parent company National Biofuels said on Monday.

The facility, the country’s first soyabean crushing and biodiesel facility would produce 800,000 tonnes/year of soyabean meal, and 250,000 tonnes/year of soyabean oil, National Biofuels chairman Edward Dutton, said in a telephonic interview.

RNRF, a wholly-owned subsidiary of the National Biofuels group, has commenced work at its Coega industrial development zone site in South Africa’s Eastern Cape, the company said in a statement last week adding that it was "in an advanced stage of the application to the South African government for a manufacturing licence".

The project was also designed to produce pharmaceutical glycerine. The main feedstock, soyabean, would be grown locally, it added.

"Soyabean meal is the backbone, and the protein source for the human foodchain. We took a view two and a half years ago that we would only use a feedstock that complemented food production," Dutton said.

"The food versus fuel debate is legitimate and more than likely to influence policy in most countries. Soyabean also produces premium biodiesel, and it does not change over time."

However, he added, "Right now, we could make a better margin selling soya oil. The country imports soya oil, so it would help to replace this amount with our production and use the remainder for biodiesel."

The facility would be capable of producing 288m litres/year of biodiesel. "We have allowed 15% for biodiesel export, mainly to Australia. The bottomline is the rebate. In Australia, we get 38 cents to the litre," he said.

Production was scheduled to begin in the second half of 2009 and during the first year of operation, the new plant would process 900,000 tonnes of soyabeans, of which about 273,000 tonnes would be sourced locally.

The facility was expected to generate over R4.5 bn in annual revenue for the local economy, the company said in its statement.

"The country has been producing half a million tonnes a year of soyabean, and has an immediate potential of 3.5m tonnes/year," Dutton said. "Other than garage-sized producers, there is currently no other biodiesel production in South Africa," he said.

National Biofuels Group, based in Sydney, also incorporates a soyabean processing and biodiesel operation in Australia, a biodiesel trading operation, and a research and development company.

($1=R8.19)

By: Arujnee J Ram
+65 6780 4359

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