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| NEWS |
| 18-01-2006 |
ALL NEWS |
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Biodiesel comes to Southeast Asia |
Singapore, Southeast Asia’s most urbanised country, could be the site of the region’s first biodiesel plants. Three companies involved in the international agricultural trade have announced plans to build two plants on the petrochemical hub of Jurong Island worth at least S$84 million (US$1=S$1.7).
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A joint venture between Singapore’s Wilmar Holdings and US agricultural giant Archer Daniels Midland Company (ADM) will invest S$50 million in a 150,000 tonnes/year plant scheduled to come onstream by December 2006. It could be expanded to 300,000 tonnes/year. Germany’s Peter Cremer GmbH said its first phase 200,000 tonnes/year plant - costing US$20 million – is due to start up in early 2007. Both plants will largely use palm oil imported from the region which produces more than 80% of the world’s palm oil. Biodiesel production could help open up an oleochemicals cluster on Jurong Island, which currently is dominated by oil, petrochemicals and chemicals companies. Both companies, which initially will export the bulk of their plants’ output to the West, expressed the hope that Singapore would encourage greater biodiesel consumption. They added they were interested in building a chain of biodiesel plants in other Asian countries.
“We look forward to a favourable biofuel policy encouraging consumption of biodiesel in Singapore,” said Kuok Khoon Hong, chairman and CEO of Wilmar. ADM owns close to 20% of the shares of Wilmar, a leading edible oil refiner, lauric producer and one of Asia’s largest oilseed crushers. Wilmar chose to build the plant in Singapore due to the country’s excellent infrastructure, potential for downstream integration and its ‘agricultural neutrality’ or absence of bias in favour or against any crop, said chief financial officer Chua Phuay Hee in an interview with EnergyAsia.
The company is in discussion with the Singapore government to promote policies that would encourage biodiesel consumption, said project director Rahul Kale. In a statement, G. Allen Andreas, ADM’s chairman and chief executive, said: “As a world leader in renewable fuels, ADM is proud to partner with Wilmar in this joint venture in Singapore. With persistent high crude oil prices, global demand for biodiesel has been growing rapidly. Renewable fuel sources such as biodiesel help extend oil reserves and make for a cleaner environment.”
Chua Taik Him, assistant managing director at the Economic Development Board (EDB), said: “We are very pleased that Wilmar and ADM are setting up the first biodiesel production plant in Singapore. As one of the largest in Southeast Asia, the plant will be critical in the development of Singapore’s biodiesel and oleochemical industries. Biodiesel and its by-product glycerin can be important building blocks for mass-market products such as surfactants and cosmetics. This investment is an endorsement of Singapore’s strengths as a competitive location for alternative energy and as a centre for applied science and engineering to renewable resources.”
Elaborating on the need for Singapore to be more pro-biodiesel, John Hall, Peter Cremer’s managing director in Singapore, said: “Biodiesel is environmentally friendly, doesn’t smell and does not produce sulphur. Vehicles also don’t need lubricants to run on biodiesel. It is made from renewable crops that burn cleaner than traditional petroleum-based fuels.” Mr Hall, who moved to Singapore from Europe last year to evaluate the feasibility of building the plant, said biodiesel is enormously profitable as an alternative fuel with petroleum diesel currently selling at around US$60-$70 a barrel. “We’re competitive with diesel priced at US$25 to $30 per barrel,” he said. Hall said his company chose Singapore because of its excellent connectivity. “From Singapore, we have easy access to abundant palm oil feedstock from the neighbouring countries of Malaysia and Indonesia. Singapore hosts major chemical logistics players providing terminalling services and shipping to our markets around the world,” he said. There is another advantage for building the biodiesel plant on Jurong Island, according to Hall, with the possibility of the company building and integrating higher value downstream plants to produce esters and surfactants at a later stage.
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