Carotech inks contract with Trafigura

Carotech, one of Malaysia’s largest producers of palm methyl ester, has signed a RM200 million (€43.9 million) contract with Trafigura Beheer, Amsterdam, for the export of its refined and distilled palm biodiesel to the US and Europe.

‘Trafigura has been our customer since 2007 and this agreement is important to us as it would take up more than 50% of our capacity and provide certainty to our operations, bankers and suppliers,’ MD David Ho says.

At present, Carotech operates two production facilities in Perak which produce more than 120,000 tonnes of biodiesel a year.

Under the agreement, Carotech will supply Trafigura with 60,000-84,000 tonnes of its CaroDiesel biodiesel annually or 5,000-7,000 tonnes monthly, at a price based on a formula at a premium over the crude palm oil price.

The one-year contract would begin in January.

Based in Switzerland, Trafigura has access to over 30 million barrels of storage facilities through a combination of owned terminals under its network and long-term lease agreements with third party oil terminals.

The European biodiesel industry is set to grow with the European Parliament reaffirming binding targets of 5% for biofuels in transport by 2015, increasing it to 10% by 2020.

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