Bio-diesel JV in Andhra to tap overseas market

Friday, 23 May 2003, 07:00 Hrs
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NEW DELHI: An Andhra Pradesh company has entered into a joint venture with an Austrian firm to set up a bio-fuel plant that would export environment-friendly bio-diesel, derived from non-edible vegetable oils.

Coastal Paper Mill, which has been taken over by Andhra Pradesh Paper Mills, has entered into the joint venture with Austria's Energia to set up a 850 million integrated bio-fuel plant in Kakinada on the southern Indian state's coast. The joint venture company is called Naturol Fuels Ltd.

The location has been selected with an eye on ease of exports. Land acquisition for the plant is complete and the joint venture company is in the final stages of arranging finances.

"We are in the advanced stage of financial closure with ICICI Bank for funding the project, which will be the first of its kind in India," C.S. Bhaskar, managing director and CEO of Hyderabad-based Naturol Fuels, told IANS.

"We are planning an integrated plant that will mainly produce bio-diesel and bio-pharma grade bio-pesticides and glycerine as by-products," said Bhaskar, who was here to attend an international meet on bio-fuels.

Energia, as the main equity partner with 50 percent stake, will provide the technology, help identify the right plants for large-scale plantation and other raw material for processing to make bio-diesel while the Indian partner will have management control.

While it is keen to cater to the domestic market, Naturol Fuels is initially eyeing the overseas market as several countries like Germany, Japan and the U.S. are looking for economic sources of bio-diesel.

There are currently around 2.5 million vehicles running on bio-diesel in the European Union region. These vehicles have logged an estimated 30 million miles (48 million km), the same as in the U.S., which has a smaller fleet of bio-diesel operated vehicles.

With vehicle manufacturers guaranteeing the performance of bio-diesel, there is a growing environment-conscious population switching over to a mix of normal diesel and bio-diesel, apart from bio-diesel run vehicles.

"There is currently a big shortage for bio-diesel in the overseas market and our principals would like to pick up stock from India," said Bhaskar.

The company is hoping to have its 300-tonne bio-diesel per day plant operational in Kakinada by December 2004 and start manufacture using imported low-end, non-edible palm oil.

"In the long run, we are planning to undertake plantation of jatropha and other non-edible oilseeds in wasteland and dry arid regions for manufacture of bio-diesel," added Bhaskar.

The bio-fuel plant will also produce around 30 tonnes of bio-pesticides and glycerine.

For the domestic market, Naturol Fuels has initiated talks with petroleum marketing major Indian Oil Corporation (IOC), which is engaged in research and development of bio-fuels like ethanol and bio-diesel and has tied up with the Indian Railways to supply five percent bio-diesel blended diesel for its operations.

"We are in talks with IOC for a buy-back arrangement for the domestic market. In keeping with the trend in the international market, where bio-diesel is priced three cents less than normal diesel, in India too we would like to price it less," said Bhaskar.

The company also sees tremendous socio-economic benefits from this project as plantation of non-edible oilseeds in wasteland would not only enhance green cover but also generate employment.
Source: IANS
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