07/09/05 (The Star) - The Malaysian Palm Oil Board (MPOB) will nextmonth call for tenders to build a new bio-diesel plant, the output ofwhich will mainly be exported to Europe.

MPOB director-general Tan Sri Yusof Basiron said the new plant, which willcome onstream in about a year, would have an initial annual productioncapacity of 60,000 tonnes.

The RM40mil plant " to be sited in Pasir Gudang or Port Klang " willlikely be jointly managed by MPOB and another partner. So far, 10companies had expressed interest to operate the plant, Yusof said.

Tan Sri Yusof BasironOf late, he said, bio-fuel had generated much interest, especially inEurope, and that MPOB had received many inquiries from parties in Japan,South Korea, China and Columbia.

Bio-diesel fuels are typically made from oils such as soybeans, rapeseed,or sunflowers, or from animal tallow. But MPOB will use crude palm oil(CPO) as its base material.

Yusof said the MPOB-produced bio-diesel would likely be priced at US$40 toUS$50 a tonne.

"Against the crude petroleum price of around US$70 per barrel, the localbio-diesel production is viable, especially for export markets wherepetroleum sale is not subsidised," he said after giving a talk on thevegetable oils industry.

Yusof said the use of CPO as raw material auger well for the future priceof the commodity. Citing rapeseed as an example, he said its use forbio-fuel production in Europe had jacked up the crop’s price to someUS$300 a tonne more than CPO. Similarly, the price of CPO stands a goodchance of rising, more so that it is currently the lowest among vegetableoils.