Agritrade acquires its first biodiesel plant with Solfuels

Agritrade Resources, an integrated energy and shipping solutions provider, is entering into renewable energy with Solfuels Holdings, an experienced biofuel operator, by acquiring a biodiesel plant in Arkansas, US.

Agritrade will own 51%, while Solfuels Holdings will hold the remaining 49% of the biodiesel plant.

The plant is located beside the Mississippi River and sits on a wide area of 38.2 acres of land.

Production from the project, Agritrade’s first investment into biodiesel, will cater to the increasing demand for renewable energy in the US market.

Leveraging on the operational expertise of both Solfuels and Agritrade International, parent company of Agritrade Resources, the partners will collaborate to retrofit the plant to accommodate multi-feedstock including yellow grease, rendered animal fats, inedible corn oil, and refined vegetable oil.

This will help to decrease the cost of production as the group can select the most cost competitive feedstock to maximise profitability.

The biodiesel plant will have a production capacity of 137,000 tonnes per annum and is expected to be operational by April 2017.

The total investment on the plant for Agritrade and Solfuels will be $2.97 million (€2.79m).

‘Strategically located’

Henri J. Bardon, CEO and director of Solfuels, said: “This partnership is in line with our business plan to further expand our operations globally. This biodiesel project presents an attractive investment both in terms of value as well as location.

“Strategically located near Memphis, a major biofuel refining and distribution centre in the US, the plant is conveniently accessible by water, road and rail transportation, which will decrease overall logistics cost.”

The conclusion of the acquisition is timely, given the US Environmental Protection Agency’s recent signal of commitment to the growing biofuels market.

In the latest update to the federal Renewable Fuel Standard (RFS) released on 23 November, the agency mandated that at least 19.28 billion gallons of ethanol and other biofuels has to be added in petrol supplies in 2017, boosting biofuel quotas to record highs.

Consequent to this development, the prices for renewable identification numbers have increased, presenting another revenue stream for the partnership.

“The investment underscores our interest in renewable energy and our efforts to expand into this area. We are also pleased to be able to partner Solfuels Holdings, an experienced player in the biofuels industry that has strong expertise in biodiesel plant operations, to lead our first foray,” Ng Xinwei, CEO of Agritrade, commented.

“With the global movement towards sustainable energy sources, governments in both developed and developing countries have expressed support and passed policies that are supportive of renewables. Moving forward, Agritrade will continue to increase our footprint and seek new business opportunities in the renewable energy space,” Xinwei added.

Agritrade Resources will finance this investment with existing internal resources and expects the biodiesel plant to contribute positively to the company’s financial results from 2018 financial year.