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Rising fuel prices bring hope for bio-diesel producers
Bio-diesel producers hope to benefit from the continually rising fuel prices, as motorists seek relief from high prices at the petrol pump.
The KOLAO Farm and Bio-Energy Company is encouraging farmers around the country to grow jatropha for supply to the company to produce bio-diesel.
The company has already planted about 150 hectares of jatropha on an area of concession land in Xaythany and Thoulakhom districts of Vientiane, Director of KOLAO Farm Mr. Viengmaha Manisy told Vientiane Times yesterday.
The company has also encouraged farmers around the country, including those in Luang Namtha, Xayaboury, Bokeo, Saravan and Vientiane provinces, to grow the plant on more than 10,000 hectares of land, but this number is still inadequate to meet the company's needs.
“We plan to grow the plant on a further 12,000 hectares of land concessions but the areas are currently under consideration by the government,” said Mr Viengmaha.
In 2009, the company purchased 179 tonnes of jatropha from farmers, followed by 270 tonnes last year and expects to buy more than 300 tonnes this year.
The company has now produced about 100 tonnes, or 110,000 litres, of jatropha oil and 20 tonnes has been exported to Sweden for market testing.
Sweden has expressed interest in purchasing about 300 tonnes of oil a year from the company but it lacks the capacity to supply such quantities, he said.
“We will be more than happy to produce bio-diesel for supply to the domestic market if the government gives approval,” Mr Viengmaha said.
The government is still hesitant about fully supporting the industry and has instead lent assistance to bio-fuels produced using other resources.
Many companies can't afford to start jatropha-based bio-diesel production because of the high capital costs involved and the lack of a commercial bio-fuel market, he explained.
The KOLAO Farm and Bio-Energy Company is the biggest investor in jatropha in Laos and is hopeful of making the venture profitable.
The company has built a factory in Xayaboury province with the capacity to process 40 tonnes of jatropha a day.
The company is purchasing jatropha from farmers for about 2,000 kip a kg, although those farmers under contract to the company receive just 1,000 kip a kg.
To ensure maximum benefits, the project requires close cooperation from the government, said Mr Viengmaha.
He believes government promotion of jatropha oil will help the company to produce bio-diesel for domestic supply and some for export.
“We don't yet know the number of people who would use this oil as we haven't done any market tests,” he said.
Mr. Viengmaha said according to an agreement between the company and the government, the company should sell its bio-diesel for around 3 percent less than regular diesel as it can import various materials tax free.
vientiane times
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