Biofuel plant delays production by another six months

via CAAI

Tuesday, 04 January 2011 15:00 Soeun Say

CAMBODIA’S first biofuel production plant has pushed its restart back until at least July, as the high prices of cassava continues to halt company plans, according to company officials.

“At the moment, we have no plans to reopen, but we hope to restart in July of this year,” said Kim Jong-ho, director of administration at MH Bio-Energy Cambodia.

“The price of cassava remains high. We are waiting for the price to decrease, and now, we are harvesting our cassava,” he said yesterday.

South Korean MH Bio-Energy plant is a Kandal province factory that uses cassava to produce ethanol for sale largely to Europe. It first opened in November 2008 with an initial investment of US$30 million.

In 2009, MH Bio-Energy plant exported 29,406 tonnes of bio-ethanol to European markets.

However, the plant’s doors have been closed since May 2010 because of rising crop prices.

The firm has acquired some 8,000 hectares to plant cassava in a bid to end purchases of cassava on the open market, but to date has only planted 1,700 hectares.

“It is not enough for our production,” said Kim Jong-ho. “We need to plant 6,000 hectares of cassava to support our production this year.”

The factory requires 10,000 tonnes of cassava per month to produce bio-ethanol, a compound that can be blended with petrol.

Dry-chip cassava currently fetches $240 per tonne, which is a hike up from $170 to $180 per tonne the product commanded on markets this time last year, he said.

MH Bio-Energy had already postponed its re-launch due to similar concerns. In October, the firm’s Chief of Administration Boeun Thy had said he had anticipated a December restart, due to the high price of cassava.

Banteay Meanchey province cassava farmer Chok Pouk said that cassava prices rested on demand, largely from Thai and Vietnamese markets.

She currently sells at 2,800 baht or $93, per tonne for the unprocessed crop, up from 1,200 baht or $45 last year.

Cambodia ought to push to open markets other than Thailand and Vietnam to increase opportunities for farmers, she said, adding her farm had increased to 400 hectares on the back of larger demand.

“I hope there will be a new market in China,” she said. “We’re looking to export to China soon.”

Last month, Prime Minister Hun Sen said a deal on cassava was to be signed during a five-day official to China.