Chemrez exports biodiesel to Germany

Chemrez Technologies Inc., the country’s largest premium coco-biodiesel firm, has started exporting its product called BioActiv to Germany, marking its foray into the European market.

ChemrezTech chief operating officer Dean Lao Jr. said the company shipped 1.6 million liters of coco-biodiesel to Rotterdam at $900 per 1,000 liters (roughly P70 million). Rotterdam is the entry port for oil shipments into Germany.

Lao said more shipments will be made in April via ChemSynergy AG, Chemrez Tech’s exclusive marketing agent in Europe.

ChemSynergy is a trading company specializing in oleochemicals including biodiesel. It supplies biodiesel to German fuel distributors and some oil companies for blending with petro-diesel. Fuel distributors generally supply fleet accounts.

According to ChemSynergy, some fleet accounts in Germany use 100-percent biodiesel as fuel for their vehicles since biodiesel is tax-exempt in thus comes out cheaper than regular petro-diesel.

Lao said the company is now planning to improve its distribution channels in Germany to allow it to expand its presence and eventually spread out to other European countries with mandates for the use of biodiesel such as Italy, Spain, France and Belgium.

Europe is a fast growing diesel market where the government currently mandates a 2.75-percent biodiesel blend which will gradually be increased to 5.75 percent by 2010.

Lao said BioActiv has passed with flying colors the stringent quality tests in Germany and Japan where other biodiesel products from Malaysia, Indonesia and even the Philippines have failed.

Lao said one of the main strengths of BioActiv is its very low cold filter plug point or its stability during cold weather. While the more popular palm oil-based biodiesel solidifies at 12 degrees Celsius, BioActiv has been shown to remain liquid at way below the freezing point of water with a cold filter plug point of -8 degrees Celsius.

BioActiv enjoys an advantage in the export market because biodiesel, made from coconut oil, has unique qualities which helps clean fuel systems, boost engine power and reduces nitrous oxide emissions.

Anticipating a strong demand for bio-diesel, Chemrez Tech is planning to put up a new bio-diesel plant in the next two years, estimated to cost P2 billion. The new plant will be three times the size of its existing plant.

It is also looking at exporting to Australia, and Taiwan which are seeking alternatives to petro-diesel but have limited capacity to produce crops for the manufacture of biodiesel.

ChemrezTEch expects its bio-diesel business to account for half of its sales and over two-thirds of its profits this year.

Chemrez currently sells its premium coco-biodiesel BioActiv in the domestic market through a nationwide network of distributors in drums and bottles, and through local oil firms which sell them as bottled or pre-blended additive to regular petro-diesel.

The domestic demand for coco-biodiesel is estimated at 70 million liters a year based on the seven billion liters of petrodiesel consumed by the country in 2005. The figure is seen to more than double to 160 million liters of biodiesel with the passage of the Biofuels Act.

Chemrez is eyeing a net income of P536.67 million this year on revenues of P4.72 billion next year. The increase in sales and earnings will be due to the consolidation of earnings from powder coating, resins and oleo-chemicals as well as the full operation of the new Chemrez biodiesel plant.