MH Bio-Energy fails to meet export target during first year

Photo by: NGUON SOVAN

Trucks sit parked outside the MH Bio-Energy Cambodia ethanol plant in Kandal province. The facility was closed for a week from the end of August over pollution concerns.

via CAAI News Media

Wednesday, 03 February 2010 15:02 Nguon Sovan

SKorean operator dismisses earlier forced closure as reason for export shortfall

MH Bio-Energy Cambodia denied Tuesday that the temporary suspension of production over suspected environmental pollution led the firm to miss its export target for last year by 26.4 percent.

In 2009, the South Korean business exported 29,406 tonnes of bio-ethanol to European markets. Its target was 40,000 tonnes. Bio-ethanol is a fuel which, when blended with petrol, can be used by vehicles to reduce polluting emissions. It can be made by processing cassava.

Kim Jung Ho, the company’s director of administration, said the below-target exports had not resulted from the one-week suspension of the factory by the Ministry of Industry, Mine and Energy in late August because of pollution concerns.

Instead, he blamed building issues, saying: “We could not achieve our original plan, due to the delay in production while we restored our factory last April.”

Kim Jung Ho said that the plant expects to export 40,000 tonnes of bio-ethanol to European markets this year, due to increasing demand for the product. He added that the price of bio-ethanol exported from Cambodia increased 12 percent in the past year, to US$640 per tonne from $571 a tonne in February 2009.

“The price of ethanol goes hand-in-hand with the price of oil. When oil prices go up, the bio-ethanol price goes up, too,” he explained.

The price of cassava, which is an ingredient in ethanol production, has also soared in recent months thanks to reduced local output and rising demand from Thailand. One tonne of dry-chip cassava fetches between $160 and $170 a tonne, up around 17 percent from $145 a tonne in December and 51 percent from the May low of $112 per tonne, according to Kim Jung Ho.

MH Bio-Energy’s Kandal province plant opened in November 2008 and buys at least 10,000 tonnes of cassava a month.