Biodiesel firm raises £26 million to boost production
The growing market for biodiesel was highlighted this week when UK based firm D1 Oils raised almost £26 million to fund expansion in new and existing territories.The AIM listed company is expanding its operations in new and existing territories to meet the increasing scale of opportunity in the biodiesel market with joint ventures in India, China and Saudi Arabia.
The jatropha plant produces oil-rich seeds which are used as feedstock by biodiesel refiners. It is a preferred option to rape seed, the company has said, as it can produce high yields across the developing world, often in soils considered unfit for other plants. D1 has also found ways of growing the plant in semi-arid areas using waste water (see previous feature).
"I am pleased to be able to report that D1 Oils is making excellent progress and has accelerated certain key components of its business plan," said Karl Watkin, Chairman of the company. "D1 Oils has further increased its opportunities worldwide as the market is getting stronger, partly through Kyoto and international government policy initiatives, giving us the opportunity to gain a further competitive advantage in key markets."
D1 is set to increase its planting programme to cover 267,000 hectares compared to the original stated 37,000 hectares and will be deploying up to nine D1 20 refineries by the end of 2006 as against a previous target of three in its Admission document. In India, its joint venture company, D1 Mohan Bio Oils Ltd, has expanded its initial planting target of 5,000 hectares to 100,000 hectares.
In addition, it has announced a 50 year Chinese joint venture with Sichuan Yangtze River Technology Company Ltd, to develop a Jatropha biodiesel refining and feedstock supply business with a target of producing 500,000 tonnes per annum.
In Saudi Arabia, it has entered into an alliance with Abdullaf Al-Rajhi International Group for the design, development and implementation of waste water management facilities as well as infrastructure for the reclamation of up to 300,000 hectares of land suitable for producing Jatropha crops.
Philip Wood, Chief Executive of D1 Oils said the placing and new joint ventures would see the company expand more rapidly.
"We expect China and India to be two of the largest markets in the world for biodiesel. In addition to the expansion of our business in India, where planting targets have increased twenty fold, we now have an exciting new joint venture in China with the potential to put us in a market leadership position," he said.
D1 listed on AIM last September (see related story).
By David Hopkins