Carotech plans to triple biodiesel output

Carotech plans to triple biodiesel output
by Reuters

Carotech Bhd plans to more than triple its bio-diesel production to 125,000 tonnes a year, as it ramps up its core business activity of producing vitamins from palm oil.

The firm, a 55% subsidiary of Hovid Bhd, produces Vitamin E extracted from crude palm oil, and in the process gets bio-diesel or palm methyl ester as a by-product.

Carotech expects strong revenue growth from bio-diesel sales, given the growing global demand for green fuel, as nations from Asia to Europe seek ways to reduce dependence on fossil fuels and cut green house gas emission.

“We have gotten a head start in the market as we have been supplying bio-diesel to oil traders since 1995,” managing director David Ho told Reuters. “Now we just have to be aggressive in securing new clients.”

Ho said bio-diesel exports could contribute 60% of the company's revenue in 2007, up from 50% in 2006, as production increases.

Carotech, based in Perak, sells bio-diesel to oil companies for blending with petroleum fuel.

Earlier this year, it secured a two-year contract worth RM155mil to supply bio-fuel to Osaka-based Hatakeyama Oil Corp.

Carotech started operating its second vitamin extraction plant in May and aimed to start another unit by June 2007, Ho said.

He said Carotech's bio-diesel prospects were unlikely to take a big hit due to a spike in crude palm oil prices and a decline in petroleum, which has sparked a global debate on the viability of vegetable oil-based bio-fuels.

“It will affect us slightly. We will try to pass it on to our bio-diesel prices.”

The official did not disclose Carotech's exact bio-diesel prices, but said it sells the bio-fuel at US$600 to US$700 per tonne in short- and mid-term agreements.

The company posted a net profit of RM12.3mil for the year ended June 2006, an increase of 70.8% from RM7.2mil in 2005.

Proposed plantations merger up to shareholders, says Nazir

Since last week, CIMB Investment Bank have proposed to use Synergy Drive Sdn Bhd to merge the three largest plantation companies in Malaysia, namely the Sime Darby Bhd, Golden Hope Plantation Bhd and Kumpulan Guthrie Bhd.

According to the bank, by merging the plantation operation, the new company can cut cost and improve profit and it will become the world largest plantation company that contribute 8% to the world total palm oil production.

Proposed plantations merger up to shareholders, says Nazir
By Surin Murugiah

CIMB Investment Bank is leaving it up to Sime Darby Bhd, Golden Hope Plantations Bhd, Kumpulan Guthrie Bhd and their shareholders to decide on the proposed RM31.4 billion merger of the three companies by Dec 27.

"We have made presentations to the boards (of the three companies) and tabled the offer.

"We now leave it to them to decide," CIMB Group chief executive officer Datuk Nazir Razak told reporters in Genting Highlands on Dec 5 when asked to comment on the merger proposal.

He said the companies had 30 days to decide on the offer by Synergy Drive Sdn Bhd, which is the proposed special purpose vehicle to group together the three companies and their subsidiaries.

Asked what would happen if no outcome was achieved by that date, Nazir said: "We will cross that bridge if we have to. The offer date cannot be in perpetuity."

CIMB Investment Bank announced on Nov 27 of Synergy Drive's offer to buy the assets of the three plantations companies. It will see their existing major shareholders Permodalan Nasional Bhd, retaining control of the new enlarged entity.

Meanwhile, Sime Darby chief executive officer Datuk Ahmad Zubir Murshid told reporters in Kuala Lumpur that its directors planned to meet by Dec 25 to consider the proposed merger.

Renewable Energy from Palm Waste

Not only we can get bio-diesel from crude palm oil (CPO), but the Empty Fruit Bunches (EFB) that used to be production waste from the palm oil mill has since become quite valuable. Instead of burning liquid petroleum gas (LPG), some factories have modified their furnaces to burn EFB as fuel. For every 1 tonne of CPO produced, the palm oil mill will produce 1.1 tonne of EFB as waste. Therefore, for countries like Malaysia and Indonesia where the oil palm industry has matured, you can get unlimited supplies of EFB.

The Indonesian government has looked into this seriously and the result is promising.

According to Directorate General of Estate Crops, Ministry of Agriculture, 5.3 million ton of EFB was produced throughout Indonesia in 1997. Utilization of this amount of EFB as power plant fuel would potentially result in generation of 229 MWe.

The project described in this report is a power plant combusting 220,000 ton/year empty fruit bunches (EFB) in a specially designed high-pressure boiler and generating 10.3 MW electricity with a steam turbo-generator. The plant will be located in Pangkalanbrandan (regency of Langkat), a small town about 80 km northwest of Medan, the capital city of North Sumatra province (see Map). The EFB is collected from six existing palm oil mills and transported to the site. EFB is a technically challenging fuel due to high moisture content, fibrous nature and the high potential of the ash to slag in the furnace. Equipment has been specifically designed for dealing with this waste. The estimated economic life of the power plant is 20 years.

The objective of this project is to generate electricity for sale to the grid of PLN (the State Electricity Company of Indonesia) through utilization of surplus biomass residue from palm oil mills. This renewable energy project will offset the requirement of diesel generation to satisfy the ever-growing demand of electricity in the surrounding area. Thus this project would fit well to the principles and rules of Clean Development Mechanism (CDM). Potential estimated net reductions in Greenhouse gases (GHGs) emissions are 55,650 ton CO2-equivalent per year. (PDF)