FGV Biotechnologies Sdn Bhd, a subsidiary of Felda Global Ventures Holdings Bhd (FGV), is set to capitalise on rising biodiesel demand in the country and the world.
Its chief executive officer Wira Adam said the company was supplying biodiesel in Malaysia and overseas markets, which are expected to expand in future as more consumers “go green”.
“Biodiesel demand is rising globally with more countries joining the bandwagon to announce biodiesel mandates.
“Once our second plant is ready, FGV Biotechnologies will contribute RM1 billion in earnings to our parent FGV in the next three years from RM300 million at present,” Wira said in an interview, here, recently.
FGV Biotechnologies is the country’s largest biodiesel producer and a unit under FGV’s downstream cluster.
FGV in July reorganised its operations into six clusters — upstream, downstream, sugar, rubber, research and development, and transport, logistics, marketing and others.
The clusters are part of the group’s long-term plan to become leaner and more efficient with targeted revenue of RM100 billion by 2020 from between RM10 billion and RM12 billion currently.
Wira said palm oil-based methyl ester, which fetches between US$700 and US$1,000 (RM2,350 and RM3,350) a tonne, has an advantage as it is cheaper to produce compared with that of rapeseed or soya bean.
FGV Biotechnologies owns a biodiesel plant in Kuantan, which churns 100,000 tonnes a year, of which half is for domestic consumption and the remaining for exports.
“There is huge demand for biodiesel in European Union countries such as Germany, France, the Netherlands and Spain, and in China, the United States as well as Malaysia, which has just announced its B7 mandate with total consumption of 575,000 tonnes,” he said.
B7 refers to seven per cent palm methyl ester mixed with 97 per cent fossil-fuel based diesel.
Wira said FGV Biotechnologies planned to use B20 for its own vehicles and to power up its mills and factories in future.
The company will also expand its Kuantan plant via a joint venture with M2 Capital Sdn Bhd and US technology provider Benefuel International Holdings S.A.R.L to buy a neighbouring facility.
FGV, M2 Capital and Benefule will own 60, 20 and 20 per cent stakes, respectively, in the joint venture.
FGV Biotechnologies was also on the lookout for merger and acquisition, Wira said.
The company has bought a local biodiesel operator and is in the process of buying another.
Malaysia has some 20 biodiesel operators, of which half are
active.