Firm to build P700-M ethanol plant
Wednesday, March 21, 2007
Filipino-owned Biofuels 88 Corp. (BF88) is investing P700 million for the establishment of ethanol manufacturing facility in Bataan to be supplied to independent oil companies in the country.
The project, which is listed under the Investment Priorities Plan under the listing Energy – Development of Fuel Blends, was approved on a non-pioneer status without prejudice to upgrading it pioneer once it is established that the project will be utilizing "new and clean technology" as specified in the IPP specific guidelines.
Under a pioneer status, BF88 would be entitled to six years of income tax holiday incentives as against four years ITH for non-pioneer status projects.
Based on its BoI application, the company would produce 19.8 million liters a year or 60,000 liter per day of fuel grade anhydrous ethanol suited for gasoline blending using either sugarcane juice or molasses as feedstock.
The plant in Mariveles, Bataan is expected to start commercial operation in July 2009 employing 40 people.
Its specific clients include independent oil industry players Flying V, Filpride, Filoil, Eastern Petroleum, Seaoil and Total, which would be requiring ethanol as fuel blend for gasoline-fueled vehicles. The project is a response to the call of the government to engage in alternative fuels program to help reduce the cost of fuel and reduce pollution problem in the metropolis, which is largely caused by smoke emissions of vehicles using gasoline or diesel.
According to the company, the use of fuel ethanol reduces the government requirement of crude oil and improves the country’s security of fuel supply.
This wholly-owned Filipino project, which is partly-owned by the Villavicencios, would be financed through a 70 percent loan and 30 percent equity.
BF88 is only one of the companies building an ethanol plant.
Earlier, the BoI approved the project registration of San Carlos Biotechnology Inc, a joint venture between British-led Bronzeoak Corporation and the National Development Corporation, is building a 100,000 liter per day plant in Negros Occidental.
The interest in ethanol manufacturing, is being triggered by the passage of the BioFuels Act which mandates the blending of 5 percent ethanol with gasoline, which will be later increased to 10 percent. Implementation of the law is expected early May this year.
Alternative fuels are being encouraged by the government in order to cut the country’s oil importation. Studies have showed that a 10 percent ethanol blend with gasoline would result to potential gasoline displacement of about 565 million liters, or equivalent foreign exchange savings of 4 million per year.
Ethanol production is expected to also uplift the sugarcane industry. Each ton of sugarcane is priced at P1,700.
The present Philippine ethanol demand is about 400 million liters a year that would require 20 ethanol plants with a maximum output of 20 million liters annually to meet the demand.
In 2009, the Philippine demand is expected to rise to 500 million liters of ethanol.
posted by philpower @ 5:40 AM,
