1/2/06 (The Star)  - Golden Hope Plantations Bhd (GHope) plans to consolidate its biodiesel projects this year, but will remain active in land expansion for oil palm cultivation in Indonesia. 

Group chief executive Datuk Sabri Ahmad told StarBiz that GHope would need to review the capital expenditure (capex) in its three biodiesel plants - two in Klang, Selangor, and one in the Netherlands. 

“We do not want to overstretch the capex and hope to streamline the projects,” he added.

Having said that, GHope has proposed a new biodiesel plant in Bintulu with the Sarawak government and a foreign party. The plant, with production capacity of 150,000 tonnes per year, is slated to be the biggest in Malaysia.

Sabri said the group also received invitations for strategic alliances in biodiesel projects with parties from South Korea, Japan and India.

“We will consider these proposals but consolidation in biodiesel will be on our agenda this year,” he added.

GHope, which aspires to be the world's biggest biodiesel producer, is believed to have invested over RM100mil in its biodiesel projects.

Despite being a new player in biodiesel, Sabri said GHope had facilities to provide the feedstock for biodiesel production.

“We need to fork out RM15mil to RM18mil for a 60,000-tonne per year biodiesel plant. However, players without the support facility will need a minimum RM40mil for a similar operation,” he added.

In Europe, the investment would hit a high of RM100mil for a 60,000-tonne per year biodiesel plant, Sabri added.

For GHope's biodiesel plant in Amsterdam, he said: “We need less than half of the normal investment in Europe, given our 40% stake in Unimills' refinery in the Netherlands”.

Sabri said the biodiesel industry was no longer considered “high-tech”.

“Efficiency is the key word,” he said, adding that the focus would be on sustainability in raw materials, which represent 75% of the total production costs.

As a plantation group, he said GHope was “lucky because the raw materials (palm oil and palm-related products) produced can be used for both food and biofuel production”.

Sabri said GHope also planned to invest in human capital resources and would continuously improve on research and development.

”We need to have a new set of competencies, like chemical engineers and energy traders, as well as more advanced technology in biodiesel, possibly from the Western countries,” he added.

On GHope's plantation division, Sabri said it would acquire more land in Indonesia and was currently talking to several parties.

He said ideally, GHope would like a plantation land bank of about 100,000ha in Indonesia.

“We plan to initially take about 50,000ha - either matured or green field - over the next five years,” he added.

He said the plantation division would be the growth drivers for GHope this year, with crude palm oil prices expected to range between RM1,500 and RM1,600 per tonne. 

Meanwhile, the group's first biodiesel production at Jomalina Estate in Klang is slated to commence in July.