January 24, 2008

 

Renova to build second biodiesel plant in Argentina

 

 

Renova SA, a joint venture between local grain exporter Vicentin SAIC and Glencore International AG, will build a second biodiesel plant, local daily El Cronista Commercial reported Wednesday.

 

The company expects the plant to come on line in June or July of this year.

 

In October, Renova inaugurated a US$20-million biodiesel plant on the banks of Argentina's La Plata River, the first of a wave of major projects that have been coming on line over the past months.

 

Most of the other major grain exporters are also racing to take advantage of the tax and other incentives designed to boost the sector.

 

Aceitera General Deheza and Bunge Ltd. (BG) built a US$40-million plant, Louis Dreyfus Group is investing US$45 million to get into the game and Repsol YPF SA (REP) has a US$30-million project in the pipeline, according to the Rosario Grain Exchange.

 

Argentina exported 319,093 tonnes of biodiesel in 2007, the first year of large-scale production, according to the Agriculture Secretariat. Of the export total, 76 percent went to the US and 23.7 percent to Europe, the secretariat said.

 

Biodiesel producers netted US$268.4 million from the exports, based on an average price of US$841 a tonne, according to the government.

 

Producers started exporting biodiesel in April 2007, dedicating most of their capacity to meet rising demand for the product in international markets as countries implement requirements for it to be mixed into diesel. Eight companies currently are producing biodiesel in Argentina, with installed capacity at 600,000 tonnes a year, according to the secretariat.

 

The government is providing tax breaks and other incentives to encourage the setup of biodiesel and ethanol plants.