Methes Energies maximises assets

Methes Energies says it will start offering epoxidized soyabean oil (ESO) and natural polyol from its facility in Sombra, Ontario.

Both of these bio-based products help address growing global demand for the replacement of non-sustainable products, such as fossil fuel chemicals, across a wide range of industries. Among other things, ESO can be used in the production of polyvinyl chloride (PVC) plastics and natural polyol in the production of paints, coatings, castings as well as insulating foams.

The demand for both products has been increasing steadily in recent years and now accounts for a combined market value in excess of $1 billion (€900,000 million) in North America.

Methes' biodiesel processors (the Denami 3000) can be re-tooled and adjusted for the production of ESO and natural polyol with minimal capital expenditures. The company will initially convert about 20% of its 13 million gallon per year biodiesel capacity for the production of ESO and natural polyol.

Production and sales of these two products is expected to begin in the third quarter of this year. According to Methes, if and when the biodiesel market improves to provide better margins than ESO and natural polyol, it can restart the production of biodiesel within approximately two weeks.

The lack of clarity from the EPA regarding the Renewable Volume Obligations for 2014, 2015 and 2016, as well as the Blender's Tax Credit for 2015, has continued to negatively impact the biodiesel industry. With this in mind, Methes has been working on alternative ways to maximise the use of its assets in Sombra, Ontario and to increase shareholders' value.

Nicholas Ng, president of Methes, says: 'It is clear that selling biodiesel for less than our cost does not make much sense. We found two products that are compatible with our renewable core business and a great fit to our current technology, location and on-site resources. We see a bright future with ESO and natural polyol as well as much better margins.

'To have the ability to produce other bio-based products using our existing assets is a big advantage. Biodiesel sells for about $3 per gallon right now with no margins and some natural polyols are selling between $5 and $17 per gallon with healthy margins.'

 

SOURCE: Methes Energies