Extracted from Malaysiakini

Golden Hope Plantations to build biodiesel plant

Dec 20, 05 9:40am

Palm oil giant Golden Hope Plantations today announced plans to build the country's biggest biodiesel plant amid increasing demand for alternative fuel and spiraling oil prices.

Chairman Ahmad Sarji Abdul Hamid said the proposed biodiesel plant in eastern Sarawak state on Borneo island would focus on the overseas market, especially East Asia.

"We have identified a partner for this joint venture and the feasibility study will be carried out soon," Ahmad Sarji was quoted as saying by the national Bernama news agency.

The plant, which has a production capacity of 150,000 metric tonnes a year, will be the company's fourth biodiesel factory after two in peninsular Malaysia and one in the Netherlands, he said.

The company's three other biodiesel plants will be operational by the end of 2007, he said.

"Our first biodiesel plant in Banting, Selangor, is expected to start production in July next year," he said.

That plant will have a production capacity of 30,000 tonnes of biodiesel per year, while Golden Hope's second biodiesel factory will be able to produce 60,000 tonnes per year, he said.

Local or foreign partner?

Ahmad Sarji declined to say if the partner for the joint venture would be a local or foreign company, instead citing the need for a feasibility study.

"The feasibility study will be conducted first. As for the partner for the joint venture project, this is a quite a sensitive issue and we will announce it later," he said.

Malaysia recently announced it had approved nine licences to build bio-diesel plants here, including to foreign investors.

Singaporean and Italian companies among others have applied for licences to build the projects.

The government, keen to reduce dependence on fossil fuel, is already building three biodiesel plants, each with annual capacity of 60,000 tonnes of biodiesel, at a cost of RM120 million.

Strong demand for biodiesel from European nations as well as Colombia, India, South Korea and Turkey was fuelling the growth of the industry, as more countries sought to reduce their reliance on oil.

Malaysia has already begun preparations to change from diesel to bio-fuels by 2008, including drafting a bio-fuel act that would make it mandatory to make the switch.

The move to bio-fuel - a mixture of diesel with five percent processed palm oil - is expected to help to reduce fuel costs to the country with the price of crude oil remaining high.

Malaysia is the world's largest producer of crude palm oil. Output soared to nearly 14 million tonnes last year, half the world's production.

It exported 12.5 million tonnes of the oil last year, worth some US$8 billion, accounting for 58 percent of global palm oil exports and 27 percent of the global oils and fats trade.

- AFP