D1 Oils deepens losses, to focus on low-cost feed

28 March 2007 08:00  [Source: ICIS news]

SINGAPORE (ICIS news)--D1 Oils on Wednesday said it will focus on low-cost and long-term supplies of inedible feedstock to combat falling margins in the UK biofuels market over the next two years as full-year operating losses deepened.

The UK-based biodiesel producer reported operating loss of £13m ($25.5m/€19.1m) for 2006 compared with a £8.6m loss in the previous year.

"Rising prices for edible oil and the reduction in crude prices have meant a significant reduction in margins for the UK biofuels industry, said Elliott Mannis, the company’s chief executive officer.

"Whilst this is an issue, it is also a validation of our strategy of focusing on low-cost, long-term supplies of inedible feedstock."

D1 was now working to ensure that it has a vertically-integrated business to deliver jatropha oil into the UK during 2008, said Lord Oxburgh, D1’s non-executive chairman.

The company expects to offtake jatropha oil from plantations spanning an area of more than 150,000 hectares by the end of March.

The wild seed plantings undertaken in 2006 have the potential to achieve yields of up to 1.7 tonnes of oil per hectare after five to six years when the trees are mature, said D1.

D1 generated a turnover of £1.6bn in 2006, up 240.4% from 2005, due to the sale of 3,286 tonnes of biodiesel to its main offtake partner Petroplus.

Pre-tax loss for the year deepened to £12.6m compared with £7.9m in 2005.

($1 = £0.51)

(€1 = £0.68)

ICIS Copyright © Reed Business Information 2009

Author: Jeanne Lim
+65 6780 4359

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.