Chemrez allots add’l P700M for biodiesel proj

Publicly-listed Chemrez Technologies Inc. will allocate close to P700 million to ensure adequate supply of coco-biodiesel in preparation for the implementation of the Biofuels Act by April this year.

ChemrezTech chief operating officer Dean Lao Jr. said together with sister company Malay Resources Inc., the Chemrez group will specifically spend a total of P691 million for logistics (storage tanks, barge and trailer trucks).

The implementation of the Biofuels Act directs oil companies in the Philippines to make B1 diesel, or petroleum diesel fuel blended with one-percent coco-biodiesel to be made available by April 2007.

Lao said the firm already built its continuous process biodiesel plant with enough capacity for the mandated blending and there is now a need for storage, logistics and cash flow to operate at this capacity and scale.

Towards this end, ChemrezTech has spent P44 million to put in place a storage capacity for three million liters of coconut oil as feedstock; storage capacity of two million liters for finished product – BioActiv; purposely-built 1.5-million liter barge to facilitate the transport of BioActiv to oil companies’ terminals; and dedicated tank trailers.

Malay Resources, a wholly-owned subsidiary of Chemrez Tech parent company D&L Industries, has also spent P138 million for more berthing facilities, barges and tanks dedicated for storage of BioActiv coco-biodiesel in its San Juan operations along the Pasig River.

Lao said ChemrezTech has also forged supply arrangements with coconut oil millers and refiners to service the plant’s requirement of 4,500 to 5,500 tons per month, including the logistics to transport this volume to the Chemrez biodiesel plant in Libis, Quezon City.

He added that the firm has already secured P509 million in working capital which was raised during its successful public offering last year to service this scale of business.