First In Spec to build three plants in South Africa
The company is to invest R1.5 billion (€135 million) in the construction of three plants to convert waste cooking oil to biodiesel. The first, to be built in the port town of Richards Bay, on the east coast, is projected to cost R350 million and to be operating by March 2011. It will have a capacity of 50 million litres a year (Mly).
FIS plans two further plants, one in Richards Bay and one in the Western Cape, each with a capacity of 100 Mly. These will begin construction in 2012.
FIS plans to sell the biodiesel produced to industries such as mining, forestry, fisheries and agriculture, which can obtain tax credits if they reduce their carbon emissions.
Biodiesel producers have been reluctant to invest in producing for the South African transport sector because there is, as yet, no firm commitment to introducing a biodiesel mandate in South Africa, although there are plans to introduce a B2 mandate in 2013.
FIS Biofuels has already secured contracts to buy 15 million litres of waste vegetable oil a month from Canada, India and Australia. Louis Nyiri, the company’s managing director, defended the decision to purchase feedstock from abroad: ‘In South Africa, there is about 360 million litres of wasted vegetable oil but it ends up in the wrong industry. There are people who add [bleach] to it so that it looks like brand-new oil and they sell it in the rural areas,’ he said.