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Published on August 24, 2007

Pure Biodiesel will start producing B100 fuel next August, targeting annual revenues of Bt2.5 billion from supplying its parent company Rayong Purifier as well as Shell, Caltex and Esso.

The company is constructing a Bt400-million biodiesel plant with an annual capacity of 100,000 tonnes or about 300,000 litres a day, managing director Suwinai Suwanhirunkul said yesterday. Financing is via a loan from Kasikornbank.

"Once commercial operations start next year, we should reap Bt1.25 billion in revenues and profits of Bt100 million," he said.

With the targeted revenue and profit margin of 5-7 per cent, the investment should be recouped in five years, he added.

About 30 per cent of the output of pure biodiesel, or B100, will be supplied to Rayong Purifier and the rest to the other major oil retailers.

The plant will use as its raw material 100,000 tonnes of palm oil from four or five plantations with which the company has contracts. This will obviate the need to import palm oil.

Suwinai believes that biodiesel demand will rise, as the Energy Business Department is requiring oil retailers to mix B100 in diesel in a 2:98 ratio.

The authorities have also signalled a further requirement to increase the ratio of B100 in diesel to 5 or 10 per cent.

When the plant is up and running, the company will review whether it needs to increase capacity, in which case it would be doubled and the new facility would be located in the same area in Rayong's Map Ta Phut, where it has about three rai of vacant land.

"While the capacity increase will primarily serve local demand, we plan to export B100 particularly to Europe which has shown greater concern for the environment. We're ready to export the product as

our plant is running on technology from Italy and Belgium.

"We're also studying the possibility of joining up with partners, as well as supplying products to cosmetics manufacturers," he said.

Suwinai plans to list Pure Biodiesel on the Stock Exchange of Thailand at some point, depending on its financial performance and market conditions.

He said that, unlike ethanol, B100 had bright market prospects due to the government's alternative-fuel policy and demand for raw materials from industries like cosmetics.